Microsoft sets pricing, fee sharing for services

By Daisuke Wakabayashi, Tuesday July 8, 9:06 am ET

SEATTLE (Reuters) - Microsoft Corp (NasdaqGS:MSFT - News) introduced on Wednesday pricing for its suite of online services targeted at corporate customers and a revenue-sharing plan to encourage other companies to sell the software company's products.

The company plans to charge corporate customers a monthly subscription of $15 per user for a suite of "hosted" software, which includes e-mail, Web meeting, collaboration and messaging applications running on Microsoft's computers.

Microsoft Online Services is part of the software maker's effort to capitalize on the shift by corporate customers to abandon their own in-house computer systems for "cloud computing," a less expensive alternative.

The company built its business selling software to run on individual machines, both computer servers that power entire businesses and personal computers. But, in recent years, it has invested billion of dollars in massive data centers, which are the basic infrastructure for a wide range of Web services.

It has started offering corporate customers the option of having Microsoft run their e-mail, collaboration or sales programs on the software giant's computers and delivering those applications over the Web as a monthly subscription service.

"We're seeing customers, partners and even competitors embrace this flexible approach to the cloud," Stephen Elop, president of Microsoft's business division, said in a news release.

Microsoft said it signed a number of new online services customers including Nokia (Helsinki:NOK1V.HE - News) and Danish shipping and oil group AP Moeller Maersk (Copenhagen:MAERSKB.CO - News).

The company's software suite is priced at $180 a year for each subscriber while rival Google Inc's (NasdaqGS:GOOG - News) competing product, Google Apps, which comes with e-mail, messaging and document sharing, costs around $50 a year per user.

Microsoft argues that its offerings are more advanced than Google Apps. Technology administrators can manage Microsoft Online Services' accounts in the same way it deals with accounts of users running on their own computer systems.

Redmond, Washington-based Microsoft said it will share 18 percent of the subscription fees with companies that bring in new customers to the online service suite in the first year and 6 percent each year over the life of the contract.

By employing a revenue-sharing model, Microsoft said it can probably add more customers than it could alone and it could encourage other companies to build applications to work with its online services.

The company also introduced Deskless Worker Suite, which includes stripped-down online versions of its Outlook e-mail application and SharePoint collaboration software for $3 a month per user.

The software suite is targeted at workers such as nurses and factory employees who have traditionally not been given e-mail accounts or other forms of productivity software. By offering a low-cost product that can be accessed through a Web browser, Microsoft believes it can broaden its base of users.

(Additional reporting by Eric Auchard in San Francisco; Editing by Derek Caney)

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Why text messaging may be on the way out

Don Reisinger,  Cnet News.com

I'm sure the very thought of text messaging entering the final stages in its life is a bit too much to fathom right now, considering Gartner believes 2 trillion messages will be sent this year and most analysts think text messaging will grow rapidly, but I'm not so quick to jump on the bandwagon.

The way I see it, more and more companies are realizing that the cell phone is an ideal place to feature chat applications and with popular devices like the iPhone leading that charge, I think text messaging growth will be stymied sooner than you think.

Just look at Google's latest announcement for all the proof you need. According to the company, it has officially released a new version of Google Talk for the iPhone and iPod Touch, which will allow you to send Gmail messages to friends without the need for any additional software or require to spend any cash to do it.

And it's that last component that could make all the difference in the world: it's free to use.

Let's face it -- text messaging prices are ridiculous. Can someone explain to me why I'm forced to pay around 20 cents per message for something so trivial? Of course, many people (especially those with kids) would rather spend money on the unlimited texting plan and be done with it, but it still isn't the ideal solution.

Instead, a service like Google Talk is. Granted, using Google Talk implies data charges and only those with the ability to get online will be able to use it, but I think this service is just the first step in a major movement that could change the way we interact with cell phones.

The way I see it, most people have proven that they would gladly interact with a cell phone keyboard, so that very critical issue is already set aside. And although text messaging is made available to everyone and anyone can interact with anyone else, the cost is the real sticking point.

If enough cell phones featured reliable and worthwhile chat applications that their friends actually used, I think the 2 trillion messages sent mark would be reduced by a significant margin and more people would be willing to use chat applications than text messaging.

But it's that level of engagement that matters most. Without one major leader in each market, chatting won't take off. Much like AIM in the US and MSN overseas, a dominating chatting application must emerge and have a large enough customer base that everyone's friends will be able to use it without the need for text messaging.

And although that may seem like a long way out, I'm not so sure that's true. Instead, I believe that Apple has transformed the cell phone industry and more cell phones will feature the kind of capabilities we've come to enjoy from smartphones. And as that happens, chat applications will become more ubiquitous as well. All the while, our reliance on text messaging as a communication medium will fall by the wayside.

Google Talk is just the first step in eroding text messaging use and creating an environment that's dictated by chatting applications and online interaction.

It may not happen overnight, but rest assured that text messaging won't be around for long and it may even be gone before you know it.

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Microsoft to offer Office by subscription

Wed Jul 2, 2008 2:00pm BST

SEATTLE, July 2 (Reuters) - Microsoft Corp (MSFT.O: Quote, Profile, Research) plans to introduce a new way to sell its Office software suite on Wednesday, offering customers a subscription model instead of the traditional one-time license fee.

Starting in mid-July, the company will offer U.S. consumers Microsoft Equipt, which comes packaged with the latest version of Office, Windows Live online services and security software.

Equipt, which was introduced under the code-name "Albany," will be available for $69.99 a year and it can be used on up to three home computers, according to Microsoft. The product will be available at around 700 Circuit City (CC.N: Quote, Profile, Research) stores.

By getting a subscription service, customers can get the latest updates and newest versions of the software. The regular price for a one-time license of Office 2007, home and student edition, is $149.99, according to Microsoft.

The company faces competition from Google Inc (GOOG.O: Quote, Profile, Research) and a slew of start-ups including privately-held Zoho, which are offering applications comparable to Office but delivered through a Web browser for free or a monthly subscription.

(Reporting by Daisuke Wakabayashi; Editing by Tim Dobbyn)

As Intel Nears 40, Technologist Offers His Look Into Future

By DON CLARK, The Wall Street Journal, July 1, 2008

SAN FRANCISCO -- A top Intel Corp. technologist used the company's impending 40th anniversary as an opportunity to make four broad predictions about the future of the chip industry. Not surprisingly, he sees the company's products evolving rapidly and spreading into many new places.

Patrick Gelsinger, a senior vice president who has served as Intel's chief technology officer, told reporters at a briefing here to expect a sharp acceleration in the number of computing engines packed on each chip. While today's personal computers have chips with the core circuitry of one to four microprocessors, Intel is laying the groundwork for the "many core" era -- products featuring tens to hundreds of electronic brains.

That won't help with today's common computing jobs, like running word processors and spreadsheets, but Mr. Gelsinger predicted programmers will find many new ways to take advantage of the added processing power.

Medical images that take hours to process will become instantly available and interactive, speeding diagnoses, he said. Accurate speech recognition will replace typing input, and the basic interface software that controls the look and feel of computers will dramatically evolve to better interpret what users want. "It becomes immersive, intuitive and interactive," said Mr. Gelsinger, who is general manager of Intel's digital enterprise group.

As with some of Mr. Gelsinger's other predictions -- which amplify broad themes the company has sounded before -- there is a catch with many-core computing: It will require the development of new programming languages, tools and techniques, he said.

Another prediction is that the company's underlying chip design -- often called x86, but also labeled IA, for Intel architecture -- will push into cellphones, consumer products and other applications where it is not now commonplace. The biggest obstacles in cellphones include power consumption -- even Intel's latest Atom chip draws too much power -- and a stable of companies use an energy-efficient design from ARM Holdings PLC.

Intel's Atom chips are suited for ultra-small portable computers, and Mr. Gelsinger said the company is committed in the next version to target the cellphone market. The company's x86 technology also could bring huge software advantages, he said, as thousands of companies that make programs for PCs using the technology add products for handsets.

A third prediction concerns an even broader vision of ubiquity for Intel chips: that computing and Internet capability will become available to every person on the planet, 24 hours a day, Mr. Gelsinger said. That vision implies combinations of microprocessors, sensors and other devices that further enhance the capabilities of products such as automatic teller machines, cars and door locks. "You will be interacting with the computing experience without ever thinking of it."

A fourth prediction concerns Moore's Law, the oft-quoted prediction by Intel co-founder Gordon Moore about how the industry doubles the capabilities of chips every year or two. In particular, Intel is betting heavily that the industry will move to a new generation of the silicon wafers that serve as a substrate for chip manufacturing.

By moving to 450-millimeter wafers -- up from 300 millimeter wafers today -- the average cost of producing each chip can be driven down by 40%, Mr. Gelsinger noted. Assuming that happens, he predicted more chip makers that can't or don't want to put up the billions of dollars required to use 450-millimeter wafers will drop out of the industry.