IBM's service is live, however, while Microsoft is expected to take its service live by year-end.
IBM's offering is focused on e-mail only, but the company plans to roll out other services over time including IM, mobile support and other options, according to Kevin Cavanaugh, vice president of messaging and collaboration software for IBM.
Microsoft's Exchange Online also is a vanilla offering of Exchange, but Microsoft partners plan to build other services around the offering, which is targeted at companies with 5,000 users or more and priced at $10 per user per year.
IBM already features its Sametime Unyte Web conferencing service and just released a beta of Bluehouse, a collection of collaboration services available over the Web.
Cavanaugh said the price for Notes Hosted Messaging will start at $10 per user per year for 1,000 users.
He said IBM will have two models, one catering to users that already have Notes and Domino licenses. In that model, IBM will sell Notes Hosted Messaging and let the user apply their licenses to the service.
In the second model, "If you don't have the licensees we will sell you those and the services," Cavanaugh said.
He said that IBM believes users that have not already moved to Lotus Notes 8 could evaluate hosted Notes as an alternative to upgrading software and/or hardware as they move off older 6.5 and 7.0 Notes versions.
Cavanaugh also said IBM would custom build for users with existing Domino application infrastructures who want to move their Notes messaging into a service.
"We have yet to figure out some standard way to sell them the app since users's apps differ so much," Cavanaugh said.
The service will offer two back-end options: a single Domino server or a cluster of Domino servers. Each option is defined by differing service-level agreements and availability levels.
IBM is hosting the Notes service within its own data centers.
IBM has a number of partners that host Notes environments for users, including Blue Sky Hosting, Domino Developer Network and Prominic .Net.
IBM itself has never had a formal hosting service around Notes/Domino for customers. What has been offered is one-off, highly customized environments. This new service will be opened to a mass audience.
In other news, IBM also said that Hyatt Corporation would standardize on Notes, Domino and Sametime for unified communications and collaboration across its global business. Domestic hotels will roll out Notes this year, and international properties will deploy in 2009.