Microsoft’s Way of Storing Files on the Internet

Microsoft is moving to deliver more software technology over the Internet as a service, forced to follow an industry trend led by Google, its newest archrival.

But its strategy is a careful balancing act, adding Internet services without offering online versions of its most lucrative desktop products like Word, Excel and PowerPoint.

Microsoft is making announcements today that it plans to offer a free service, called Office Live Workspace, that will allow people to store, access and share documents online. A user will be able store up to 1,000 documents on a workspace on the Web.

But a Word or Excel document in the online workspace can be edited only if the user has bought Microsoft’s Word or Excel software. “The ideal case is where a person has Office,” said Rajesh Jha, a vice president for Microsoft Office Live products.

In an offering for larger companies, Microsoft will host the data center software for e-mail, workgroup collaboration and instant messaging and provide those as online services to corporate customers with 5,000 or more users of Microsoft Office desktop software, a product second only to Windows as a profit maker for the software giant.

Microsoft has long had online services for consumers, including its Web-based e-mail, Hotmail, and instant messaging service known as Windows Live Messenger. Last year, the company introduced an online service for small businesses, providing them with their own Web sites and e-mail accounts. It also has a customer relationship management service, Microsoft Dynamics CRM, which competes with Salesforce.com, another leader in the software-as-services trend.

The moves by Microsoft, analysts say, represent an effort to quicken the company’s pace in Internet services. “Microsoft is recognizing that it needs to be seen as a fast follower in this space, and now it is seen as a slow follower,” said David M. Smith, an analyst at Gartner, a market research firm.

Microsoft describes its strategy as “software plus services.” Increasingly, industry analysts say, software will be a blend of online and offline abilities. Google, for example, introduced programming tools called Google Gears in May to help people use its Web-based applications like e-mail and word processing when a user is, say, on an airplane.

Yet Microsoft champions a vision of Web-based services that is firmly moored in the company’s mainstay products. Office Live Workspace, for example, can be used by anyone with a browser for tasks, ranging from a business team jointly drafting a sales proposal to a family sharing and updating a household calendar. (Individuals can sign up for a workspace at www.officelive.com, though the service will not begin until later this year.)

Microsoft has so far resisted the advice of some industry analysts and company insiders who say Microsoft should offer simple, online versions of its most popular desktop applications like Word and Excel. It would be better for Microsoft, they say, to offer those alternatives itself than to allow rivals to seize this emerging market.

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Cubic Telecom to Launch Global Phone

It’s amazing the way the Internet keeps toppling traditional businesses. Telegrams have gone away. Music CD sales are tanking. Newspapers are hurting.

One especially lucrative business, however, has somehow escaped the Internet’s notice so far: international cellphone calls.

That’s about to change. Early next month, a small company called Cubic Telecom will release what it’s calling the first global mobile phone.

But first, some background. Cellphones from T-Mobile and AT&T rely on the same type of network (called GSM) that most of the rest of the world uses. In theory, then, you can take these phones to other countries and make calls as usual. (Most Verizon and Sprint phones work only in the United States.)

Unfortunately, international roaming runs from $1 to $5 a minute. A 20-minute call home from the Bahamas on a T-Mobile phone will set you back $60. The same call home from Russia on an AT&T cellphone will cost a cool $100.

Sure, you could always rent a phone or use a phone card when you travel — but then nobody knows how to reach you.

It costs a lot to dial overseas from here, too. Verizon charges $1.50 a minute for calls to most countries. AT&T’s rates can be truly Dr. Seussian — like $2.52 to Greece, $2.80 to Iraq and $3.65 to Australia. That’s per minute. Make one 20-minute call to New Zealand, and you owe $75 to AT&T.

Now, most carriers offer special international plans: you pay more a month, you get slightly lower roaming rates. But even they can’t touch the appeal of Cubic’s cellphone. It makes calls to or from any of 214 countries — for 50 to 90 percent off what the big carriers would charge.

On this phone, a 20-minute call from the Bahamas costs $5.80 (that’s 90 percent off T-Mobile’s rate). The Cubic price from Russia is 49 cents a minute (90 percent lower than AT&T).

And there’s no monthly fee and no commitment for any of this. It works like a prepaid phone, where you put some money in your account and use it up as you talk.

At this point, the appropriate world traveler’s response ought to be involuntary drooling, but there’s more to the story. Most of it is more good news, but also more complexity.

For example, consider this: at the MaxRoam.com site from Cubic, you can request local phone numbers in up to 50 cities at no charge. Now you can have a Paris number, a London number and a Mexico City number that your friends overseas can use to call your cellphone.

No longer must you hand out a series of international phone numbers for each trip you make, or expect your colleagues in the United States to pay $50 a pop to reach you.

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