Microsoft has announced today the general availability of their latest additions to their Online Services portfolio, hosted Exchange and Sharepoint services.

Exchange is the most significant component, representing one of the largest and most convoluted server-side packages which nearly every company is compelled to deal with on-premises currently. The base price of $10/user/month doesn't sound bad when you read stories like that of Serena Software, which is switching to Gmail to avoid estimated costs of $1 million annually to run Exchange in-house. Microsoft can do math too; while their annual price for hosted Exchange is still roughly double that of GAPE (Google Apps Premier Edition, which happens to include Gmail service) it's still quite a bit less than many organizations currently spend to install and operate Exchange in-house. You've been able to realize cost savings in that realm for a few years now using third-party hosted Exchange services, but there are no doubt many CIOs who will feel more comfortable with Microsoft hosting its own product than a smaller third-party doing so.

The Sharepoint service also represents some savings, at $7.25/user/month, but without anything other than some back of the envelope scrawlings based on my own experience, they aren't as significant as those offered by Exchange. Sharepoint has not proven as technically complex to run and maintain, nor does it provide a service with quite the same degree of business necessity as Exchange, and so historically has not been supported and coddled as heavily.

Customers with existing Enterprise Licensing Agreements can establish an Online Services account under that umbrella, and although pricing has not been revealed for those customers, one would imagine it would be lower than the published rate. That would make sense, as economies of scale make running Exchange internally more affordable for enterprises than small businesses.

In the wake of several highly publicized incidents of GAPE adoptions, there will no doubt be a strong complusion in the IT press to portray this as another move in their manufactured horse race between Google and Microsoft for dominance in the online services market. The two companies continue, however, to represent widely divergent points of view of both the services themselves and the problems they are intended to solve, and I wouldn't expect a clear "winner" any time soon. Microsoft is most likely to cannibalize its own existing Exchange and Sharepoint customer base with this move, which is nonetheless a wise decision. The disparity between the costs and services presented by traditional server based applications and SaaS is verging into mini-computer versus micro-computer (that's PC to you young folks out there) territory. Microsoft may yet swing the transition sitting in pole position the whole way.