VARBusiness: Microsoft To Host Office Over The Net

“Microsoft, which is putting the final touches on its
server-hosting plan, now is turning its attention to the
front-office side of the business.

As part of that, the Redmond, Wash.-based company will host its
leading Office productivity suite for online or subscription use,
Microsoft President Steve Ballmer said today. The action comes just
days after Sun Microsystems Inc. unveiled plans to make its newly
acquired StarOffice suite available for rental use via its
StarPortal site. “

“Privately, Microsoft is fine-tuning a major application hosting
service it plans to detail in late October or early November,
sources said. Microsoft is chiseling away at a per-user, per-month
subscription model that will be ‘revenue-neutral’ for the company
and also will please ASPs, which are insisting on three-year
subscription commitments to recoup their investments.

Some industry observers said Microsoft is embracing the
subscription model very reluctantly as it tries to preserve a major
cash cow, Office, which nets more than $3 billion each

“One Sun executive said Microsoft had no choice but to match
Sun’s StarOffice offer because many in the small- to
midsize-business segment — the fastest-growing in the market —
likely will opt to outsource their IT infrastructure and