Hosted SharePoint stifles partners, for now

by Nancy Gohring

March 4, 2008 —

Microsoft's announcement
on Monday that it would host SharePoint for businesses of any size left some
third-party software providers surprised -- and even annoyed.

Late last year the company began hosting SharePoint for large enterprises,
and on Monday it launched a beta of the hosted service for businesses of any
size, with plans for general availability by the end of the year.

That came as potentially bad news, at least in the short term, for some companies
that have built software that runs on SharePoint. Some of them won't be able
to serve customers of the Microsoft hosted offering.

For example, KnowledgeLake has a product that lets companies scan and input
documents into SharePoint. The product includes client and server software.
Customers of Microsoft’s hosted SharePoint offering wouldn’t be able
to deploy the server component, which would prevent them from viewing or searching
documents after they scan them, said Chris Caplinger, chief technology officer
for KnowledgeLake. Caplinger was attending the annual SharePoint conference
in Seattle.

KnowledgeLake, a Microsoft Gold Certified Partner, is usually briefed by Microsoft
about these types of announcements that can affect its business. But this time
the software giant didn't tell the company in advance, Caplinger said. As a
result, he wasn't sure if Microsoft planned to enable support for his third-party
software for customers of the hosted offering.

Nintex CEO Brian Cook was similarly uncertain about what the announcement means
to his company, which offers a workflow management tool to SharePoint users.
"We're not sure how we fit in," he said. "We can't necessarily
dump our application on top of Microsoft's servers."

They may be relieved to hear that Microsoft intends to accommodate these partners
in the future. "The new beta can't run custom code today," said Eron
Kelly, director in Microsoft's business online service group. "But we're
investing heavily, so in the future we'll be able to run applications in the
online environment."

There are a couple of ways Microsoft could decide to support its partners.
It could run the third-party software on its own servers, or the third-party
companies could run their software in a hosted environment that connects to
Microsoft's hosted services, he said.

While the third-party companies were uncertain about how they might serve users
of the hosted service, they were mostly confident there will still be a large
enough market of companies that decide to use internal SharePoint implementations
instead. Even though Microsoft is showing off very large enterprises, such as
Coca-Cola, as hosted SharePoint users, most of the partners agreed that the
hosted version is more likely to appeal to smaller businesses.

"The larger organizations are less likely to go to hosted," said
Larry Roshfeld, senior vice president at CorasWorks, which offers software designed
to make it easier to build applications on SharePoint. Others agreed. That's
in part because big businesses are often concerned about letting a third party
host potentially sensitive corporate data.

Richard Howard, an IT administrator for a division of DRS Technologies with
about 650 workers, about 50 of whom currently use SharePoint, finds the idea
of a hosted version very attractive. However, he said moving to the hosted service
would all depend on cost. He's looked at offers for other hosted services that
came with astronomical price tags.

Microsoft has not disclosed what it will cost to use the hosted version of
SharePoint, said Kelly. "Price will be very attractive to customers of
any size when you take into account things that come with running and maintaining
an application like this, including hardware, people and bandwidth," he
said. Still, the value of just using one hosted service may not be "as
compelling" as buying a suite of hosted products from Microsoft, such as
Exchange and Live Meeting, in addition to SharePoint, he said.

IDG News Service