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Microsoft On Tap at Local Telcos

By Tara Seals
July 01, 2005 - Article

Microsoft Corp. dived head-first into the "software as a service" market in December 2004 with a $7 million deal with British Telecom plc to develop a suite of hosted online services for smaller businesses. It has followed up with the spring release of the Microsoft Solution for Hosted Messaging and Collaboration 3.0, a hosted service for small and medium businesses that service providers and hosting partners offer for a monthly recurring charge. Allowing providers to offer software applications as network services will be a centerpiece of Microsoft's telecom sector strategy going forward, according to the software giant.

"As voice over IP becomes mainstream and service providers begin to deploy other services over IP, growth and competition in the telecommunications industry is inevitable," says Michael OHara, general manager for the service provider business, communications sector, at Microsoft. "Service providers need to enhance their service portfolio in order to drive new revenue streams and give businesses and consumers access to the latest and greatest applications. With its software-as-a-service model, Microsoft enables service providers to deliver a variety of data, video and voice services over IP, and to package them to meet the specific requirements of their target markets."

For instance, Hosted Messaging and Collaboration 3.0 takes Hosted Exchange 2003 and adds support for hosted versions of Microsoft Office Live Communications Server 2005 and Windows SharePoint Services. Functionality includes corporatestyle e-mail, shared calendaring, contacts, document collaboration and instant messaging capabilities. Offering the group of productivity tools as a managed service brings applications typically found in enterprises into the hands of smaller businesses, says Microsoft. Also, the justreleased Microsoft Solution for Windowsbased Hosting Version 3.5 targets service providers that offer shared Web hosting or discount dedicated server hosting. The latest version introduces Web Site Starters for Windows, a set of development partner and community applications including integrated Web site building, Web blogging, forums and photo-sharing applications optimized to run in a Windows-based hosted environment.

Software-as-a-service is an untapped but key area of growth for telecom operators looking to open additional revenue streams, according to the IDC, which expects worldwide revenue growth of 25 percent from 2005 to 2008.

O'Hara sees access as a key difference between the model being inaugurated by Microsoft and the failed application service provider bubble of a few years ago. "The main difference [now] is the widespread availability of broadband networks, and with this, the ability for service providers to offer the so-called triple play of services - voice, video and data," he notes. "Hosted data services add to the bundle that service providers can offer to their customers. The battleground for service providers will be around bundling these services together in a common architecture."

Accordingly, the company continues to launch solutions to support software as a service. One of these is the Microsoft Customer Care Framework for integrating customer relationship management functions. Another is the Connected Services Framework, an integrated, serverbased software solution for aggregating, provisioning and managing converged communications services across multiple networks and a range of device types. In addition, a suite of Microsoft.NET-based packages will enhance connectivity and streamline the back-office requirements for BT's launch this month, using BizTalk Server 2004 to gain a unified view of customer data and service information for provisioning and billing.

Microsoft Corp.

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