Microsoft heading for the cloud

Microsoft has formally jumped on the hosted services bandwagon – it recently announced plans to provide online versions of its corporate email and collaboration solutions.

Microsoft has been offering subscription-based versions of its Exchange email and Sharepoint collaboration solutions running on remote hardware for some time now, but this was limited to companies with more than 5000 employees. It is now ready to offer this service to businesses of any size.

This is certainly good news for small businesses. The trend toward hosted services makes it feasible for small companies to affordably deploy powerful tools and applications previously limited to larger enterprises with deeper pockets.

Microsoft has clearly been feeling the heat from the rapid growth of the Software-as-a-Service (SaaS) model. It is now responding with a hybrid “Software Plus Service” strategy. It remains to be seen if this is enough to head off the inroads that the likes of Google and Salesforce.com have been making into Microsoft’s corporate hinterland.