Microsoft figures that in five years time half the Exchange mailboxes in the world – perhaps 160 million mailboxes – will be running on its servers in its cloud infrastructure on Exchange Online.
At least that’s
Microsoft senior vice-president Chris Capossela told Reuters going into the
Reuters Global Technology, Media and Telecoms Summit the other day.
That’s one of the
reasons Microsoft has been building massive data centers like Google – adding a
reported 10,000 servers to the population a month – to host Exchange Online and
its friends, Office SharePoint Online and Office Communications Online.
Exchange Online is of course the SaaS side of Microsoft’s traditional Exchange
mail and messaging software.
Microsoft will be
charging a larger monthly fee for Exchange Online than it would to simply buy
the traditional software but Microsoft’s margins may not be as good, Capossela
said, since it has all that hardware overhead. It will all depend on how efficiently
it can run a cloud. The customer of course saves himself CAPEX and OPEX charges
by offloading them onto Microsoft.
Coke is already an
Exchange Online customer having signed up for 70,000 seats and forsaking IBM’s
Lotus Domino system. Energizer is another. Capossela apparently thinks
Microsoft could run off any number of Lotus accounts.
Exchange Online runs
on Exchange Server 2007 and comes in a standard configuration and – for
customers with more than 5,000 employees – a personal, dedicated configuration,
both with a guaranteed 99.9% uptime service level agreement.
e-mail, shared calendaring and contacts – the specs say it supports Firefox
2.0+ – and with Active Directory there’s synchronization.
Since Microsoft’s forecast – and its margin implications – is nothing to sneeze at, we asked industry analyst and cloud spotter Amy Wohl what she has been seeing.
“The first thing to keep in mind is that we have some
semantic confusion, as is usual at this stage of a new market, around just what is a cloud. We are now pretty sure that what we used
to call grids and what we now call clouds is the same thing. But we also have
things called “platforms” that seem to be very much like a kind of cloud (and
are sometimes called clouds) and then there is SaaS itself which looks very
much like a cloud with some application software (and some SaaS vendors
describe their offering just that way). I’d say we can agree that a cloud is
managed computing power, often with applications, accessed across the Internet.
And I’ll agree that a company can have its own cloud, if it wants one.
finally enunciated a vision for its cloud computing that makes sense for IBM
and its customers. It offers a very high-end version of cloud computing
(virtually unlimited amounts of power, up to and including mainframe systems,
backed by its
“IBM actually offers even more choices that may be less
obvious. IBM provides a platform to ISVs who want to offer SaaS applications.
In that it is very much like other platform vendors like Salesforce.com, eBay,
Google or Amazon. A major difference here is whether the platform owner is also
an application provider (like Salesforce.com), whose ISVs are related to his
application offering or whether the platform provider is simply offering
managed computing, perhaps with some technical assistance and/or some marketing
oomph. (IBM offers both.)
“It was reported last week that Microsoft is moving to the
cloud. In this case, Microsoft means it is going to offer at least one of its
applications, Exchange, as a hosted application (SaaS) from its own cloud. Microsoft
intends to continue on the road of “software-plus-service,” meaning that you to
use a PC on your desk with Office to make use of the Internet-based services
that Microsoft also provides. What seems to be moving to Microsoft Clouds are
not personal productivity apps (a la Google or Yahoo’s Zimbra), but shared
services (mail, collaboration, customer relationship management). Microsoft has
been quick to note that this is a big initiative and that in five years they
would expect half their customers to use Exchange as a service. This is not
just something for smaller customers, either. Microsoft already has some large
enterprise like Coke, with 75,000 seats.
“Microsoft has other online (perhaps cloud) services such as
its Live services and new Live Mesh service for synchronizing devices of every
kind. It is also testing a consumer version of Office that will combine a basic
version of desktop Office with an array of online services.
“Last Friday, I spoke with Workday, a SaaS ERP company I’ve been
tracking since its start. It’s stirred up quite a bit of attention, boldly
claiming last April that its feature set would be at parity with SAP by next
fall. So far, it’s on schedule with its product plans, with hefty HR offerings,
including payroll and expenses, and a substantial portion of its financial
offerings. Look at its latest Workday 4.0 offering at its web site. More
interesting is the fact that although it didn’t expect to move beyond the
mid-market into the enterprise until more of its product was completed, it
already has a number of large enterprises and more in their pipeline.
“Recently I attended a Digital Transformation Forum at
“Think of it this way.
- “You can access a cloud as pure computing power, a place to load an application that needs lots of computing or requires cyclical peaks
- “You can find a cloud that provides a platform with APIs to support an ecosystem of ISVs who provide software that you find appealing
- “You can choose a cloud whose platform includes an application (Salesforce.com) that attracts other ISVs to surround it
- “You can simply find a SaaS vendor whose application is appealing – you don’t care about the cloud behind it, just the application
- · “You can build your own cloud, managed by a vendor or your own IT staff for some large-scale purpose
“And no doubt, someone, somewhere, is dreaming up some other things to do with clouds
- “A messy period with many clouds, many of them not interoperable because they’re not build to the same standards
- “An interim period of standardization
- “A period of consolidation because we really want to buy our applications in a way that they can be aware of each other and use them in a common environment. The easiest way to do this is for each of several vendors to provide a cloud with all of the applications you need and some level of integration. Remember that nothing keeps a cloud/platform vendor from being one of several vendors who offers a popular application if the ISV agrees
- “A higher level of standardization where (just as we do on the Internet today) any application can be used with any other application on the platform and through the portal of your choice.”