Within ten years, all software will be sold as services, not as boxed product, Ballmer had told journalists in a pre-speech briefing, adding that he expected Microsoft itself will act as an ASP in the sense of supplying its software online to partners. He positioned Friday's announcements as the first steps towards implementing the new Microsoft .Net strategy, announced last month - see related ASPnews.com story, Microsoft Maps Out a Net-Centric Future, Jun 24th 2000.

Pricing for the new licensing, due to be unveiled Aug 1st, is still being finalised, officials said. However it has been determined that products will be licensed to ASPs on a monthly, pay-as-you-go basis, either per user or per processor. See related ASP-News story on internetnews.com, Microsoft Outlines its ASP Licensing Model, Jul 15th 2000.

For many ASPs, the news became of only academic interest, since Microsoft had earlier in the day revealed a six-week slippage in its planned ship date for Exchange 2000 Server, which is at the core of most of the leading ASP's Microsoft portfolios (see related ASPnews.com story, ASPs Eager to Roll Out Exchange 2000, Jun 21st 2000). Previously due for release in August, Exchange will probably now ship in October.

Ballmer revealed that Microsoft will revamp its certified partner programme in October to embrace ASPs and ISVs, and announced a series of new programmes directed at ASPs. The ASP Service Delivery Initiative aims to foster go-to-market partnerships between ASPs, hosting providers and Microsoft resellers; an ASP Certification Program will recognise ASPs hosting Microsoft-based solutions to specified standards; and the vendor released a guide for developers and systems designers recommending best practice techniques for building hosted solutions. See related ASP-News story on internetnews.com, Microsoft Rolls Out its ASP Business Strategy, Jul 15th 2000.

Subscription Licensing

Microsoft's ASP licensing is the culmination of a process first revealed exclusively on ASPnews.com back in February 1999 - see related ASPnews.com story, Microsoft to allow apps rental, Feb 1st 1999.

The new licensing models mean that, for the first time, ASPs will not have to pay Microsoft upfront for software that they intend to sublicense to customers, bringing it into line with vendors such as IBM and Citrix, who have also adopted a usage-based licensing model for key platform products.

Microsoft's licensing programme is more far-reaching than its competitors', extending to applications including Office and Exchange as well as across its platform products. But while the platforms are licensed per processor, the applications are available only on a per-user basis.

Having per user as the only option on Exchange and Office will discourage ASPs from renting access to the applications on a per-session basis to casual users. However it still leaves the path open for a more radical pricing plan said to be under consideration by sources close to the company. Under this plan, applications will be broken down into individual functions, each of which will have their own monthly per-user price. ASPs would then be able to offer packages in which users paid only for the precise functions they used each month.

Per subscriber licensing is an option for several server platforms, including Windows 2000 and SQL Server 2000, that can also be taken per processor. ASPs will have the freedom to switch from one licensing mode to another, allowing them to pay a low per-user fee as they roll out a new customer or service, and then transfer to the per-processor model when they reach higher volumes of usage.

The decision to price per processor rather than per server gives Microsoft extra freedom in setting its rental pricing, as it avoids direct price comparisons being made between subscription-based offerings and traditional licences, which are priced per server.

The delay in the ship date for Exchange will allow it to ship alongside other members of the newly-named .Net Enterprise Server family, such as BizTalk Server 2000 and Application Center 2000, that are scheduled for release in September.

Ballmer's speech stressed the new business opportunities for partners in the software-as-services environment, in fields such as enterprise application integration and XML data access, BizTalk Server process orchestration, and other systems integration and management activities. He said the role of partners will expand to include hosting, metering and billing, application customisation and provisioning, and new opportunities in consulting, system development and user-experience design.

An early opportunity for partners to test those skills will come alongside Small Business Server 2000, released in beta on Friday. In addition to providing e-mail, fax, database and secure shared Internet connections, the platform acts as a gateway to business and computing services hosted on Microsoft's bCentral portal that the company said partners will be able to integrate into solutions for their customers.