Office Live a smart move

Microsoft was handing out press accounts to Office Live Premium about a week ago, so we're tinkering with it. We'll do the hands-on part somewhere else, but it's worth discussing Microsoft's strategy here. Bottom line: This is the best New Economy, Web 2.0 Internet move I've seen Microsoft make in a long time.

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Until I saw Office Live, I thought that all of Microsoft's Web services efforts had a serious "We're-chasing-Google" flavor to them. Google does a cool Webmail service; Microsoft runs Hotmail through the Web 2.0 sausage grinder and pumps out the Windows Live Mail knackwurst. Instant messenger, Virtual Earth, OneCare -- all very similar in that all of them seemed to be answers to someone else's new ideas.

Office Live is the first real step I've seen Microsoft take on its own here. Redmond's not thinking about matching Google's Writely/Spreadsheet almost-useful bundle; it's doing what Microsoft does best: hunting for profit. First thing Microsoft does when it's looking for yet another percentage of the world economy is ask customers what they're willing to pay for.

So the company asked thousands of its small-business customers what they'd actually use in a Web service architecture. Good move, because it turns out that Word 97 in a browser wasn't high on the list. What was high on the list was a one-stop shop for Web-oriented business needs: e-mail and Web hosting. Done.

Even the earliest versions of Office Live supported a new e-mail client and custom domain hosting. Office Live just carries that forward. Fifty e-mail accounts using your own domain name, each with 2GB of mailbox space and that same domain name attached to a Web site. On top of that, Microsoft has added tools: shared calendars, shared contacts, the ability to click between Office Live and Outlook. On the Web side, you get a funky Web design toolkit. Stay tuned for more on that in the hands-on review, but in the meantime, think templates. Lots of templates.

Sharing and team management are next. Microsoft again does what Microsoft has always done: Leverage existing technology. Although Windows Live Meeting is becoming venerable, the last couple of years have seen Microsoft do serious work on the collaboration front. Groove, SharePoint 2.0 and 3.0, and virtual meeting spaces, to name a few. Office Live simply leveraged that technology and turned it into Workspaces. So far, this doesn't seem to talk to Groove, which is a move I don't understand, but on the upside, it does allow you to put together customer or team collaboration spaces solely from the browser. Collaboration: Check.

Now the killer: basic accounting -- free. Very smart move. Microsoft takes its 800-pound gorilla presence in the small-business accounting space and splits it: an Accounting Express version that comes free with an Office Live account. If you go for Office Live Premium, this even covers product sales on eBay -- with more virtual marketplace partnerships to come -- and credit card processing with Equifax -- added cost, but you can for it straight from Express.

So if you're starting a small business selling widgets, this gives you everything you need: a Web site, employee management tools, accounting tools, customer tools, and payment processing. And that's right now today: no beta, no research program, no waiting on new Web technologies to perfect themselves. Sign up and go. Or if you're an accountant, you can now use the Microsoft Accounting Professional Edition but still use Office Live to have complete access to your customers' books, whether they're using Professional or Express. You can also discuss those files while everyone's looking at them using the workspace feature. That's more than slick, that's real value add.

Don't get me wrong; I'm not pooh-poohing Google's research efforts to move along Web technology. More power to them. But in terms of giving customers something that's not just new but actually new and useful right this very minute, Microsoft scored big with Office Live. I hope they keep up the trend.