Microsoft Sets Pricing, Fee Sharing for Services

SEATTLE (Reuters)- Microsoft Corp introduced on Wednesday pricing for its suite ofonline services targeted at corporate customers and a revenue-sharingplan to encourage other companies to sell the software company’sproducts.

The company plans to charge corporate customers a monthlysubscription of $15 per user for a suite of "hosted" software, whichincludes e-mail, Web meeting, collaboration and messaging applicationsrunning on Microsoft’s computers.

Microsoft Online Services is part of the software maker’s effort tocapitalize on the shift by corporate customers to abandon their ownin-house computer systems for "cloud computing," a less expensivealternative.

The company built its business selling software to run on individualmachines, both computer servers that power entire businesses andpersonal computers. But, in recent years, it has invested billion ofdollars in massive data centers, which are the basic infrastructure fora wide range of Web services.

It has started offering corporate customers the option of havingMicrosoft run their e-mail, collaboration or sales programs on thesoftware giant’s computers and delivering those applications over theWeb as a monthly subscription service.

"We’re seeing customers, partners and even competitors embrace thisflexible approach to the cloud," Stephen Elop, president of Microsoft’sbusiness division, said in a news release.

Microsoft said it signed a number of new online services customersincluding Nokia and Danish shipping and oil group AP Moeller Maersk.

The company’s software suite is priced at $180 a year for eachsubscriber while rival Google Inc’s competing product, Google Apps,which comes with e-mail, messaging and document sharing, costs around$50 a year per user.

Microsoft argues that its offerings are more advanced than GoogleApps. Technology administrators can manage Microsoft Online Services’accounts in the same way it deals with accounts of users running ontheir own computer systems.

Redmond, Washington-based Microsoft said it will share 18 percent ofthe subscription fees with companies that bring in new customers to theonline service suite in the first year and 6 percent each year over thelife of the contract.

By employing a revenue-sharing model, Microsoft said it can probablyadd more customers than it could alone and it could encourage othercompanies to build applications to work with its online services.

The company also introduced Deskless Worker Suite, which includesstripped-down online versions of its Outlook e-mail application andSharePoint collaboration software for $3 a month per user.

The software suite is targeted at workers such as nurses and factoryemployees who have traditionally not been given e-mail accounts orother forms of productivity software. By offering a low-cost productthat can be accessed through a Web browser, Microsoft believes it canbroaden its base of users.

(Additional reporting by Eric Auchard in San Francisco; Editing by Derek Caney)

 

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