Microsoft offers feds support for online services

Microsoft Corp. announced Wednesday that it would provide federal agencies services to host its software products such as Microsoft Office and e-mail in an effort to mirror Google's popular approach of offering hosted Web-based applications. Traditionally, federal agencies purchase software such as Microsoft Office through enterprise licenses that allow an entire agency to use the applications. But more users have been turning to software applications offered over the Web, such as Google's e-mail application, called gmail, which have forced software giants like Microsoft to respond by providing similar services. Microsoft's new strategy allows government customers to leverage software as a service, or SaaS, whether buying software through enterprise license or through a "by the drink" purchasing model, in which the provider charges agencies based on use.

"People think that their [software environment] has to be thin client or thick client; online or offline; customized or generic, but great [organizations] see the value of 'and,' " said Curt Kolcun, vice president of Microsoft's federal division. "Software as a service is not just about taking all applications and turning them over to another entity. It's about deciding what works best in the organization. Government agencies want ubiquitous computing capabilities that drive price points, and that's what software as a service is about. It's a consumer-focused evolution."

On Oct. 1, 2007, Microsoft released a new portfolio of online software for enterprises with 5,000 or more users, including Microsoft Exchange Online for e-mail, Microsoft Office SharePoint Online for content management, Microsoft Office Communications Online for collaboration and Live Meeting. Agencies such as the Environmental Protection Agency use Microsoft's online geospatial application called Virtual Earth, which competes with Google's mapping application, called Google Earth. Collectively, these products are the foundation of Microsoft's SaaS strategy.

"The big news is Microsoft has a strong position in this evolving market of software plus services," Kolcun said. "We offer soup-to-nuts capability, whether it be through a pay-as-you-go model or just allowing customers to try out new ways to achieve their missions without ripping and replacing what they already have today."

While some agencies may opt to have software applications hosted by Microsoft or a Microsoft business partner, those reluctant to outsource entire data-rich applications can house the software on servers in their own data centers, Kolcun said, and access the services through online applications that are maintained by contractors. Costs associated with their existing enterprise agreements can be rolled into a monthly fee to cover support and maintenance.

"When we talk about software plus services, it's how we look at the overall business," Kolcun said. "We're stepping forward to say we can provide end customer services to gain efficiency of scale, on-demand [capabilities], and advanced manageability."