Microsoft launches Office 365

Microsoft started selling Office 365, a cloud version of Office, on Tuesday.

The service will be available in 40 countries. The cloud subscription includes Web versions of Word, Excel and PowerPoint and other Office software, and also includes email service, SharePoint collaboration, video conferencing and instant messaging for $6 per user per month.

Office 365 will compete directly with Google Apps, which Google sells for $50 per user per year.

Chief Executive Steve Ballmer held an event in New York. "Where does Office meet the cloud? It's Office 365, the absolute best productivity and collaboration service for business around the world," he said.

Microsoft hopes that it can capture small businesses as customers with limited resources to manage servers. Office 365 as a cloud service offers similar features to what a business would have if it, for instance, installed an Exchange email server.

"It's exciting to imagine the possibilities particularly for the companies that have little or no IT support and very little time and resources to dedicate to technology," Ballmer said at the event, which was broadcast on the Web.

About 200,000 people beta tested the service, and 70 percent were small businesses, Ballmer said.

The service is available in 40 countries. Microsoft has partnered with 20 telecom companies to resell Office 365 with other services they sell to small businesses.

At the New York event Tuesday morning, Microsoft demonstrated how Office 365 users can set up websites on SharePoint, collaborate on a Word document with people on different computers and set up Web video conferences.

Ballmer also gave examples of small businesses using Office 365 to manage documents with customers, get rid of in-house servers and communicate with customers through video conferencing.

Here are the notes I posted in a live blog during the event.

Here is the big picture story on what this means to the competition between Microsoft and Google.

Here is the webcast from New York if you want to watch the replay, which will be available at about 8 a.m.

(Screenshot of designing website in Office 365: Microsoft)

RESEARCH IN MOTION ROGERS COMMUNICATIONS SAIC SATYAM COMPUTER SERVICES SES