Office Live Has Microsoft in Marketing Mode

The company launches Office Live today, offering three service options.

With Microsoft (Quote) building hype as it hurtles toward its much-ballyhooed Vista launch, the software vendor today released Office Live, one of the key applications expected to leverage the advanced features in the forthcoming Windows operating system.

Office Live, which offers a variety of hosted applications aimed principally at small- and medium-sized businesses, comes in three service flavors.

Microsoft Office Live Basics, a suite of free services, includes a company domain name; 25 e-mail accounts under that domain with 2 gigabytes (GB) of storage each; a Web site with 500 megabytes (MB) of file storage space; a drag-and-drop design tool for creating the Web site; the Microsoft Office Live Site Reports tool for monitoring and analyzing Web site traffic; and the Microsoft Office Live adManager Beta to help manage search advertising campaigns.

The latter feature was not included in the company's original plan, and is clearly aimed at countering efforts by Google to appeal to smaller businesses.

Microsoft Office Live Essentials, offered at $19.95 per month, includes the features of the Basic service but adds a customer relationship management application, as well as an extra 1 GB of Web site storage, 50 e-mail, calendar and instant messaging accounts and password-protected online workspaces for up to 10 users with 500 MB of storage.

Finally, Microsoft Office Premium is $39.95 per month and includes more storage and user accounts. More importantly, it offers access to a greater number of hosted business applications.

Rajesh Jha, corporate vice president of Microsoft Office Live, noted that Office Live "levels the playing field for companies with 10 or less employees by providing software and services that make a big difference."

Many analysts believe that Office Live is an important stepping stone for Microsoft with consequences that go beyond the SMB crowd.

Forrester Research analyst Paul Hamerman said that Microsoft is beginning to catch up with other companies making business applications available over the Internet.

"I see it as a precursor for them in the business applications area," he told

Laura DiDio, an analyst with the Yankee Group, argued that Microsoft is using Office Live as way of driving adoption of more business applications.

"When they first started talking about Web services, they said the goal was to have you be in one application to launch twenty others."

"This represents Microsoft's bid to move its bread and butter products into the 21st century," she told

In addition to Office Live, Microsoft has been talking up other upcoming releases among analysts and reporters, as well as partners and customers at shows around the world.

These include Office 2007 later this month; Exchange Server 2007 in December; and Vista in January 2007.

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