Microsoft questions Google Apps' momentum, touts 1M online business suite customers

Computerworld - Microsoft Corp. is slashing the price of its Business Productivity Online Suite (BPOS) by a third as it debuts the service in 15 new countries.

A Microsoft executive also touted BPOS' momentum, while questioning figures trumpeted by Google for its rival Google Apps suite.

BPOS, which includes Web-hosted versions of Microsoft's Exchange e-mail, SharePoint collaboration, and other Office communication-related apps, now costs $10 per user per month, down from $15 per user per month. Microsoft also expanded the hosted storage limit to 25 GB per user, from the prior 10 GB.

One year after its official launch, BPOS is being used by 1 million paid customers, Microsoft announced on Monday.

Chris Capossela, senior vice-president of the information worker product management group at Microsoft, told Computerworld on Monday that 70% of those users "are coming from IBM Lotus Notes or Novell GroupWise."

"That is a wonderful figure, because it means we are getting new business, not just migrating existing business to the cloud," he said.

Google has been also been bragging about its success at winning new business. It said last month that it now had 20 million active users for its Google Apps at 2 million companies.

Reuters report that number includes millions of college students using a free version of Google Apps, which lists for $50 a year (about $4 per month) per user.

Capossela said Microsoft also has millions of users for its free Live@Edu service, but said the company doesn't include them in its BPOS subscriber totals.

"I have a really hard time understanding their [Google's] numbers," he said. "You simply don't know what their paying user numbers are. Analysts predict that they are pretty small. It's hard for us to really know."

Asked what he thought of Google's high-profile win of the City of Los Angeles for a 5-year, $7.25 million deal to use Google Apps, he said, "I feel like we are winning lots and lots of deals. We can't spend too much time worrying about what they [Google] are doing. I feel good about how much progress we've made in a short period of time."

To securely serve LA's 30,000 employees, Google is building a special version of its Google Apps service to be called GovCloud. It will offer extra security and be hosted on separate Google servers so that the city's data is not co-mingled with data from other companies. GovCloud will also be certified under the Federal Information Security Management Act (FISMA).

Capossela said that Microsoft already had allowed larger customers (those with 5,000 employees or more) to have their data stored on separate servers through the BPOS Dedicated service.

Microsoft is seeking the ISO 27001 security certification for its data centers. It has "nothing to announce yet" regarding FISMA credentialing, Capossela said.

Reassuring customers worried by the T-Mobile Sidekick data outage that occurred on Microsoft's data centers, Capossela said Microsoft is "taking this very seriously and trying to learn from it."

He also said recent executive departures in Microsoft's online services group, including chief Debra Chrapaty, are not a big deal.

"A couple of people internally have taken over her duties. We have a fantastically deep talent bench," he said.

Microsoft is officially starting this week to offer service in Singapore, while starting to trial service in Brazil, Chile, Colombia, Czech Republic, Greece, Hong Kong, Hungary, Israel, Malaysia, Mexico, Puerto Rico, Poland, Romania and Taiwan. It also plans to offer the service commercially to India by the year's end.

Besides cutting the price of the BPOS suite, Microsoft is cutting the price for most individual components. Exchange Online was reduced from $10 to $5 per user per month; SharePoint Online from $7.25 to $5.25 per user per month; Office Communications Online from $2.50 to $2 per user per month; Deskless Worker Suite from $3 to $2 per user per month; and Office Live Meeting will cost the same, $4.50 per user per month.