Executive Summary

Microsoft hosts the Microsoft Online Services, business services that offer productivity, communications, and collaboration features similar to those available in on-premises Microsoft server applications. Among these are Microsoft-hosted versions of Exchange Server, SharePoint Server, and Communications Server, as well as the Live Meeting conferencing service. These services are available in various tiers, each with different levels of functionality, and can be purchased separately or in license packages, including the Business Productivity Online Suite (BPOS).

Microsoft Online Services allow customers to save money they would have spent installing and administering on-premises servers, and to receive upgrades without buying and installing new versions of the software. However, customers will usually find themselves paying more money annually to Microsoft than they pay for equivalent on-premises licenses, and subscriptions must be maintained to continue receiving the services—ongoing payments that need to be weighed against savings from reduced personnel and hardware costs. Also, the Microsoft Online Services today do not offer all of the features of the corresponding on-premises software. Finally, using a hosted service has important implications for availability, data security and privacy, and compatibility.