What Will It Cost?
Obviously, Microsoft Online Services will need to be cost-effective for customers to embrace it, but when you compare its costs to the costs of maintaining the individual servers and employing the people needed to do so, it becomes clear that Microsoft has at least reached a logical starting point. The monthly licensing fee or User Subscription License (USL) for the entire Microsoft Online Services suite is $15 per user per month, with reduced costs according to volume. Customers can also opt to license individual services. Exchange Online Standard, for example, is about $10 a month and SharePoint Online is $7.25.

Microsoft is also offering web-only USLs with reduced capabilities. These so-called Deskless Worker licenses will cost $3 per month for the entire suite and $2 each per month for the Deskless Worker versions of Exchange Online or SharePoint Online. One obvious limitation: With a Deskless Worker license, the user can access Exchange only via OWA, not Outlook.

When Will This Occur?
Microsoft will ship the initial version of Microsoft Online Services in the second half of 2008. This will include US versions of Exchange Online, Office SharePoint Online, Office Live Meeting, Microsoft Dynamics CRM Online, and a beta version of Office Communications Online. In 2009, Microsoft will provide Microsoft Online Services to customers internationally and ship a final version of Office Communications Online. The company is also preparing to add to the Microsoft Online Services product line, though it’s not saying what it will add.

Recommendations
Although I know some companies will need to host certain servers internally for regulatory, legal, or other reasons, I feel that externally hosted services are the future of business computing. This argument runs right to the heart of the “Does IT Matter?” discussion raised by Nicholas G. Carr in his book Does IT Matter? Information Technology and the Corrosion of Competitive Advantage (Harvard Business School Press, 2004). The move to cloudbased services won’t diminish our reliance on Microsoft servers or change the need for IT pros to be fluent with these products. But it will change how we access these technologies. The future of computing is distributed, and Microsoft clearly understands that. If you’re on the fence about self-hosting any of the servers included in Microsoft Online Services, or are worried about future upgrades and migrations, you should investigate this solution. It signals a sea change in the way that enterprise-class server solutions are delivered to companies and their employees.