Microsoft: 'Cloud shift not doom and gloom for Exchange'

The fact that many customers are shifting from running their own email servers to getting mail as a hosted service doesn't have to spell doom for Microsoft, according to the head of the company's Exchange business.

In an interview on Monday Rajesh Jha said that, although many see the rise of services as more of a benefit to companies like Google, he sees it as an opportunity for his business.

"I feel we will grow our share overall with the move to services," Jha said. In particular, Jha said Microsoft has a better option for small and midsize businesses than it did when its only option was for those companies to run their own Exchange servers. "I think we have a huge opportunity for growth. I don't think we are in a defensive position at all."

In a year in which many software businesses - including a number within Microsoft - took a hit, the Exchange business continued to grow last year, Jha said, saying that revenue for the product nearly hit $2bn and has 70 per cent market share among corporate users.

Jha did acknowledge, however, competition for the inbox is definitely heating up.

"It is where people spend more of their hours," Jha said. "It's become a real critical part of the day. Our competitors are smart. They see it too."

In addition to Google, IBM continues to push its Lotus Domino/Notes combination, while Cisco has said it will have a Linux-based email offering based on last year's Postpath acquisition.

Sounding a familiar refrain, Jha said he expects customers to warm to Microsoft's strategy, which lets them have the option of running Exchange themselves or purchasing it as a subscription hosted service.

"With Exchange, we don't give them any kind of technology ultimatum," Jha said. "We don't say 'Thou shalt move to the cloud'."

Microsoft has shifted its priorities, though. Unlike past versions of Exchange, Microsoft developed Exchange 2010 as a service first, and only later has it done the work on the server product. That server product, which has been in testing for some time and reached the beta stage in April, is now ready in a near-final "release candidate" form.

Among its features is one that lets users "mute" an email thread that they are no longer interested in being part of.

Jha reiterated that the final version of Exchange 2010 should be done later this year.

"I feel pretty good about how we are tracking," he said, noting that half of Microsoft's inboxes - some 80,000 - are now on the new version of Exchange. "We'll definitely be ready this year."

Original article: Microsoft: Online shift is more than even Exchange from CNET News.com