Or as Scott Gode, vice president of product management and marketing for Azaleos, put it: "Pretty much every RFP we're involved in, Microsoft is in there with BPOS. All of the CIOs are considering and looking at it, but they are unsure about jumping in with both feet."

Azaleos will monitor a company's employees on BPOS for free no matter how few of the company's other employees are on servers managed by Azaleos' remote service, Gode said.

For Azaleos, which counts 180,000 Exchange accounts under management at 150 different customers, offering BPOS as a free, value-added package will help the company woo more midmarket and enterprise customers, Gode said.

That sounds well and good, said Burton Group analyst Bill Pray, though he anticipates two challenges for Azaleos that also seem applicable to CSC.

"Azaleos' competency has been the management of on-premises systems. This offering is management of a different kind and requires brokering a relationship and technology needs between the customer and Microsoft. It takes a different set of skills and practices that Azaleos will need to develop," Pray wrote. Second, "Azaleos should operate as an advocate for the customer to Microsoft, but being the 'man in the middle' could put Azaleos in situations where they don't want to be. This can get especially complex with regards to legal issues, like [service level agreements]."

For CSC, adding the two flavors of BPOS will help CSC compete against Electronic Data Systems Corp., now an arm of Hewlett-Packard Co., as well as Northrop Grumman Corp. and IBM in the large enterprise and government markets, Boruff said.

CSC has already announced plans to offer Windows Azure, the cloud operating system Microsoft has under development, when it is released, said Boruff, a longtime Microsoft executive who joined CSC earlier this year.

CSC is talking to IBM about offering its hosted LotusLive service, as well as Google Apps, said Boruff, though he added that no agreements are imminent.

© 2007 Computerworld Inc.