Microsoft Enlists Interliant, Invests $10 Million

The day may not be too far off when the bulk of a Microsoft-based infrastructure can be maintained and hosted by a third-party application service provider (ASP).

In a recent announcement, Microsoft Corp. ( made it clear that it intends to facilitate this process. To that end Redmond enlisted the help of Interliant Inc. (, a leading ASP and tools specialist, and invested $10 million in its new partner.

The goal of the initiative is to develop application hosting for Windows 2000 server systems and Exchange 2000 Server when it is released. Collaborative platforms such as Exchange are considered a hot prospect for application outsourcing: A recent study by Zona Research Inc. ( finds that communication and collaboration ranks alongside education and training as top applications currently accessed from ASPs. IDC ( predicts the high-end ASP market will reach $2 billion within three years.

Interliant will spend the next six months talking with ASPs and ISVs to determine what kinds of applications are the best candidates for outside hosting, says Eric Sachs, vice president of operations hosting at Interliant. Interliant also will work with ISVs to educate them in best practices for building hostable applications.

After this exploratory period, Microsoft and Interliant plan to develop a software "abstraction layer" designed to ease the jobs of ISVs in the Windows/Exchange 2000 hosting market, Sachs says. The need for this type of service will be determined by the input of ASPs and ISVs, he adds. Interliant also plans to support other ASPs in the areas of billing, monitoring, and management, and to work with Microsoft on the production of documentation, coding, and testing tools for hosted applications.

An early entrant into the Web hosting market, Interliant teamed with Lotus Development Corp. ( a few years ago to create Domino Instant Host, one of the industry's first hosting platforms for rentable small business applications, sometimes referred to as Web wrap. Lotus' Instant Host is still in use today.

Right now, collaborative and Web-wrap applications seem to hold promise for Exchange 2000 hosting, although high-end applications such as enterprise resource planning (ERP) may constitute another possibility, Sachs said.

But at this time, Zona Research only found a handful of companies that entrust ERP-type applications to ASPs.

Sachs views Microsoft's forthcoming Exchange 2000 Server as better suited to application hosting than Exchange 5.5, due to Exchange 2000's greater scalability and integration with Active Directory and LDAP. "The directory structure is now much more advanced," he says. "If I, as an ASP, were managing 10 different Exchange 5.5 users, I would need to authenticate them on 10 different sites," he explains.

Exchange 2000 will incorporate Active Directory, but the next release of Exchange will hold on to its separate database. Now dubbed Web Store, the Exchange 2000 database will include first-time partitioning and clustering for greater reliability and lowered downtime, especially across large-scale deployments.

Exchange 2000 is also expected to comply with the Multimedia Messaging Format (MMF), providing greater support for unified messaging by permitting e-mail, Web pages, streaming audio and video, and other content to be stored in native file formats. More support is anticipated for mobile and wireless communications as well.

"At this point, we see unified messaging as more likely for LAN environments," Sachs clarifies. "Wireless is still a niche (ASP) market, although there will be a big surge about 18 months from now."