Microsoft rolls out plans to embrace ASPs

After a year of quietly experimenting with its software pricing models, Microsoft has outlined its plans to address the application service provider (ASP) market. As expected, Microsoft introduced special pricing for ASPs and a number of related initiatives at its Fusion 2000 event in Atlanta.

As part of the announcement, Microsoft said ASPs will be able to pay for some of its key software packages by the month instead of having to buy upfront licences -- a move that many ASPs had been requesting. ASPs will be able to license SQL Server 2000, Windows 2000 Server, Exchange 2000 and Office 2000 on a monthly basis, with the fees to be determined either by the number of named users or the number of processors on the system running the software.

Microsoft also introduced an ASP certification program aimed at helping users select dependable application hosting firms. In addition, it launched product support programs for ASPs and released documentation that's supposed to help them develop and manage services based on its products. And finally, Microsoft addressed the thorny issue of how ASPs will coexist with the software resellers that it depends on for sales.

The monthly subscriptions now being offered to ASPs will be sold through Microsoft's Certified Solution Provider channel, said Dwight Krossa, director of marketing for the company's IT infrastructure and hosting solutions group. Microsoft is also announcing programs to allow software dealers to resell the services of ASPs, he added.

ASPs applauded the Microsoft plans. Kevin Kosche, general manager of Internet and multimedia markets at Qwest Communications International, said the new pricing allows ASPs to "match your revenues with your costs a lot more easily." Qwest, in which Microsoft is a minority investor, already offers Microsoft Exchange as a hosted service for monthly fees of $15 to $25 per user. It also was involved in Microsoft's pilot project for a hosted version of Microsoft Office.