Microsoft questions Google Apps' momentum as it touts 1M online business suite customers

Microsoft Corp. is slashing the price of its Business Productivity Online Suite (BPOS) by a third as it debuts the service in 15 new countries.

A Microsoft executive also touted BPOS' momentum, while questioning figures trumpeted by Google for its rival Google Apps suite .

BPOS, which includes Web-hosted versions of Microsoft's Exchange e-mail, SharePoint collaboration, and other Office communication-related apps, now costs $10 per user per month, down from $15 per user per month. Microsoft also expanded the hosted storage limit to 25 GB per user, from the prior 10 GB.

One year after its official launch , BPOS is being used by 1 million paid customers, Microsoft announced on Monday.

Chris Capossela, senior vice-president of the information worker product management group at Microsoft, told Computerworld on Monday that 70% of those users "are coming from IBM Lotus Notes or Novell GroupWise."

"That is a wonderful figure, because it means we are getting new business, not just migrating existing business to the cloud," he said.

Google has been also been bragging about its success at winning new business. It said last month that it now had 20 million active users for its Google Apps at 2 million companies.

Reuters report that number includes millions of college students using a free version of Google Apps , which lists for $50 a year (about $4 per month) per user.

Capossela said Microsoft also has millions of users for its free Live@Edu service, but said the company doesn't include them in its BPOS subscriber totals.

"I have a really hard time understanding their [Google's] numbers," he said. "You simply don't know what their paying user numbers are. Analysts predict that they are pretty small. It's hard for us to really know."

Asked what he thought of Google's high-profile win of the City of Los Angeles for a 5-year, $7.25 million deal to use Google Apps, he said, "I feel like we are winning lots and lots of deals. We can't spend too much time worrying about what they [Google] are doing. I feel good about how much progress we've made in a short period of time."

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