How Far Will Microsoft Go with Cloud

When Microsoft announced back in November that , the company's popular e-mail system for businesses, it signaled a long-awaited change in strategy from the world's most powerful software company. This represented a concession from Microsoft that businesses want software that is fully online.

To date, the majority of Microsoft's software has come paired with servers and hardware that IT departments run and manage in-house. Now, with online services, Microsoft can manage the software in its own data centers while employees at customer companies around the world access applications through a web browser.

According to Microsoft executives, companies can realize huge cost savings by not hiring staff to manage Exchange servers or reallocate current IT staff to other areas-a refrain software as a service (SaaS) vendors have been pushing for years now.

"IT is dominated by the people cost," says Bob Muglia, president of the division. "It's the single largest expense in IT. By leveraging the scale online services can deliver, you can leverage costs and be leaner."

Hosted E-Mail Can Equal Quick Win