Move to cloud technology faster than Microsoft exepcted

“People are embracing cloud computing faster than we anticipated,” Stephen Elop, president of the Microsoft Business Division, told a Dow Jones reporter yesterday. He pointed to growth in hosted email as an example of the shift he is seeing. Elod said Microsoft is responding by cutting prices

Last week, the price of Exchange Online was cut by fifty percent, from $10 to $5 per user, while the maximum storage allotted to each user was kicked from 5GB to 25GB. An analyst quoted in this Network World story saw the changes as a direct reaction to the success Google is having with its suite of cloud apps.

The Dow Jones story suggests Microsoft’s move is connected to its recent loss of a $7M contract to Google for managing the email of Los Angeles city employees, which we covered last month.

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