ANAHEIM, CALIF. -\u00a0 Microsoft's annual Exchange user conference this week will be somewhat of a strategic juggling act as the company highlights the product's future while trying to continue developing an efficient messaging infrastructure.\n\n\nDaily coverage from the show\nSenior Editor John Fontana blogs the conference. \n\nThe company also will have a third ball in the air with the ongoing task of convincing users to adopt Exchange 2000 - which more than 70% of the installed base has yet to embrace - while fighting off competition from low-cost alternatives to such a move.Microsoft's challenge is to show corporations the value of Exchange as it evolves into its role in Microsoft's .Net Web services strategy, including why some of Exchange's traditional features such as instant messaging and conferencing are moving to the Windows .Net Server 2003 operating system. That switch will have a direct effect on IT as responsibility for some collaboration functions moves from Exchange administrators to network operating system administrators.Microsoft's Paul Flessner, senior vice president of .Net Enterprise Servers, will use his opening keynote address to explain how the .Net platform and especially Windows.Net Server foster a "connected enterprise." And he will offer details on how the forthcoming real-time communication server embedded in the operating system, code-named Greenwich, will support instant messaging and replace the Exchange Conferencing Server.He also will announce that Content Management Server 2003 is shipping and its future .Net integration with Microsoft's other business servers, such as the Commerce and BizTalk servers.But details on the future must be juxtaposed against the next version of Exchange, code-named Titanium, which is not Microsoft's full .Net release. That release, code-named Kodiak, likely won't ship for two years.So the Titanium message will focus on the fail-safe issue of reduced cost of ownership.It's the same message used by rival Lotus last week when it released Domino 6, which also is an incremental step in Lotus' move to a Web services platform based on IBM's WebSphere."Both these companies are working harder to justify upgrades by appealing to the corporate pocketbook," says Matt Cain, an analyst with Meta Group. "So what you get out of that is messages about server consolidation and compression."Those were the themes hit on by Lotus last week, and Microsoft will harp on them this week. Titanium has a number of features that support server consolidation. Microsoft also has made its Messaging Application Programming Interface (MAPI) more efficient by reducing chatter between the client and server, and added new compression technology to handle the additional mailboxes and traffic on each server.But the Titanium message might be lost on users who are trying to get from Exchange 5.5 to Exchange 2000, which is made complex by the need to upgrade to Microsoft's Active Directory."I have zero interest in Titanium now," says George Defenbaugh, manager of global IT infrastructure projects for petroleum company Amerada Hess. "I am stuck in the complexity of running Exchange 5.5 and Exchange 2000 in mixed mode and am having problem after problem with the Active Directory connector. The focus now is just to get done with this Exchange migration."But the Titanium message might play to those who are sitting on Exchange 5.5 and considering a move to one of the lower-cost alternatives that has cropped up touting the ability to replace the Exchange server and integrate with Outlook, the client for Exchange. The message is attractive because it eliminates end-user training in that client software doesn't change."Our cost analysis shows a 40% savings over Exchange for smaller organizations and as much as a 70% savings for larger organizations," says Joanne Menapace, product marketing manager for Stalker, which this week released its CommuniGate Pro Mail Server 4.0, which supports Outlook and all the published MAPI interfaces.Experts say such alternatives are getting Microsoft's attention."We have seen an uptick in interest in products like these, particularly if they have support for MAPI, which lets you do such things as calendaring," says Joyce Graff, an analyst with Gartner. "Exchange is under a great deal of pressure."\n\n\n\n\n\n\n\n\n\n\nTweaking Exchange \n At Microsoft\u2019s annual Exchange Conference this week the company hopes to prove that the next version of the platform, code-named Titanium, is designed to reduced the cost and improve the efficiency of running the messaging platform. \n\n\n\n \n\n\n\n\n\n\n\nStrategy \nFeature \nDescription \n\n\n\nServer consolidation \nVolume Shadow Copy \nQuick restore feature allows more users per server, fewer servers. \n\n\n\nCompression \nEfficient use of bandwidth for more populated servers. \n\n\n\nMAPI enhancements, MAPI over HTTP \nMessaging API made more efficient; HTTP wrapper provides better remote access. \n\n\n\nSecurity \nS\/MIME support; cookie authentication \nSignatures, encryption for Outlook Web Access users; automatic log-off using cookie. \n\n\n\nSpam blocking \nServer supports real-time connection to spam blacklists. \n\n\n\nSpam Beacon blocking \nPrevents HTML-based e-mail from grabbing users address. \n\n\n\nAvailability \nClustering \nUp from two nodes to eight nodes.