Microsoft Sets Pricing, Fret Partners

Microsoft Corp. Tuesday unveiled pricing for its hosted business productivity services and introduced the revenue-sharing plan wherein partners would be able to resell the software giant’s products.

Though revenue-sharing strategy is thought to be a tactic to encourage other companies, but not all companies were impressed with the idea.

Microsoft would be competing with the same companies in the market which are being offered to team up with Microsoft under revenue-sharing plan.

Early next year the software leviathan would launch a suite of online hosted services that includes Exchange Online, Office SharePoint Online, Office Communications Online and Office Live Meeting, e-mail, Web meeting, collaboration and messaging applications -but only on Microsoft's computers- at a monthly subscription price of $15 per user, per month.

The services are targeted on corporate users.

Microsoft Online Services is launched with the motive to promote "cloud computing," rather than in-house computer systems.

For those who want to subscribe to one or the other service alone; per user, per month charges that company is offering for different hosted services are -- Exchange Online for $10, SharePoint Online for $7.25, Office Communications Online for $2.50 and Office Live Meeting Online for $4.50 which means there is 38 percent discount on the whole suit, said Microsoft Director of Online Services Eron Kelly at Worldwide Partner Conference (WPC) in Houston.

In addition to hosted business productivity services, the company is also offering Exchange Online Deskless Worker and SharePoint Online Deskless Worker.

The deskless services will be available for $3 per user, per month.

At such a crucial time, the company is receiving a tough competition from the search engine master Google which is offering similar services at much lower rates, around $50 a year per user as compared to $180 a year per user offered by Microsoft.

The company’s pricing of hosted services would pressurize the hosted partners to "move up the stack to preserve profit margins."

"We're seeing customers, partners and even competitors embrace this flexible approach to the cloud," Stephen Elop, president of Microsoft's business division, said in a news release.

Since Microsoft does not want to break away with its loyal partner, the company figured out another model to put them at ease.

According to the second model, partners who offer the customer these hosted services would get 12 percent per user, per month, for a first-year contract, and 6 percent per user, per month, for a given contract, the company said. This makes up 18 per cent margin in partner’s share in the first year.

The interested customers can subscribe to the services through Microsoft's hosted services partners by means of Microsoft’s Hosted Messaging and Collaboration 4.5 (released two weeks ago).

Nokia and Danish shipping and oil group AP Moeller Maersk include the online services customers which have already struck a deal with Microsoft.