In five years, Microsoft expects half of all enterprise employees with e-mail to use a combined online and premises-based system like the company's Exchange Online, an executive said Monday at a launch event for that software and the SharePoint Online hosted collaboration application.

About 500,000 users have already adopted Exchange Online since a limited release for large enterprises in October 2007, said Stephen Elop, president of the Microsoft Business Division, at the event in San Francisco. That release made the two applications available, on dedicated Microsoft servers, to enterprises with 5,000 or more employees. Starting Monday, the services are available to all small, medium-sized and large organizations in the U.S., hosted on shared resources at Microsoft. They can be purchased online or through partners. The offering had been available previously in a beta test.

Though the hosted applications have been slowly rolling out over time, their wide availability is a key step in Microsoft's transition from a maker of client and server applications to a provider of ones that are hosted in the Internet "cloud" and available through any browser. The company is facing a growing trend toward hosted applications, led by giants such as Salesforce.com and Google. Elop acknowledged the shift.

"We believe this is part of a generational shift," Elop said.

Exchange Online and SharePoint Online can be purchased as part of the Microsoft Online Services Suite, which also includes Office Live Meeting and Office Communications Online, for US$15 per user per month. They are also available individually, priced at $10 per user per month for Exchange Online and $7.25 per person per month for SharePoint Online. The administrator functions of the applications announced Monday are only available in English, but end users can set their own languages through the same language tool that's in Outlook.

The applications released Monday can be used through a browser, a PC client or any mobile device that works with Microsoft's ActiveSync, with data synchronized automatically when users go online. This online-offline capability is a major feature that sets Microsoft's hosted applications apart from those of competitors such as Google Apps, said Eron Kelly, senior director of business online services marketing. It's critical to let users work with their mail, calendars and other information when they can't get Internet access, he said.

The IDG News Service is a Network World affiliate.