Microsoft (Nasdaq: MSFT) has officially launched its web-based email and Office services, part of its ongoing effort to keep Google (Nasdaq: GOOG) at bay when it comes to business software.
“Office 365” has been available in a test version since last year. It combines Web-based versions of Word, Excel and other Office applications. It also includes the Exchange e-mail system, SharePoint online collaboration technology and Microsoft’s instant messaging, Internet phone and video conferencing system.
(Read more details from Microsoft here.)
Google Inc. has its own set of office software that’s based in the “cloud,” that is, hosted on remote servers and accessed online instead of on users’ desktop computers.
Microsoft Corp. said Tuesday that it plans to charge $2 to $27 per month for Office 365 depending on what’s included. Google Apps costs $4 or $5 per month.
For an additional $12 a month, companies can add a full version of Office, including Word and Excel programs.
Microsoft is trying to keep Google’s office-productivity software, called Apps for Business, from making further inroads with corporate and government clients. The two companies are fighting for customers who want more applications hosted in the so-called cloud — on a network rather than a hard drive. The full online version of Office follows last year’s release of the more basic Office Web Apps.
“Financially, it will be a while before Office in the cloud becomes meaningful, but it provides another delivery mechanism for some of Microsoft’s mainstream products and brings them on par with Google Apps,” said Sid Parakh, an analyst at McAdams Wright Ragen in Seattle, who recommends buying Microsoft shares.
This update represents the first time Microsoft will sell a full version of Office through an Internet-based cloud service, and also marks the first time companies can license the programs on a per-user, per-month basis, said Wes Miller, an analyst at Directions on Microsoft in Kirkland, Washington.
For larger businesses, prices start at $2 for basic e-mail, and companies can get a full copy of Office and other programs like social networking and videoconferencing for $24 a month. The software services are an update to an earlier product called Business Productivity Online Suite, or BPOS.
Microsoft released Office 2010 a year ago, and said earlier this month that it’s being adopted by business customers five times faster than the previous version. Sales in the business division, which is mainly revenue from Office, rose to $5.27 billion last quarter, exceeding the $4.9 billion average of analysts’ estimates compiled by Bloomberg. The unit is Microsoft’s biggest in terms of revenue.
Office Web Apps
Microsoft also offers a consumer version of Office Web Apps, which are scaled-down versions of the Office applications. The company said earlier this month that it has almost 50 million users for those programs.
Google counts 3 million corporations and other organizations as customers of its Apps business software, including McClatchy Co., the National Oceanic and Atmospheric Administration and the states of Wyoming and Wisconsin, who signed on with Google in the past month, according to spokesman Andrew Kovacs. Google charges companies $50 a user each year, and offers a free version for consumers.
Google Apps has 30 million active users overall, and doesn’t break out how many of those are paying customers.
(The Associated Press and Bloomberg contributed to this report.)
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