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Microsoft Launches Exchange Server 2010 — But Free Competition Looms

Microsoft (s msft) unveiled Exchange Server 2010, which has been in beta testing since April, at its TechEd conference in Berlin today, and showed it working with Outlook 2010.  Exchange 2010 is the company’s latest server technology for on-premise software deployments, but it also incorporates many features aimed at web and online services. It has a new, integrated email archive designed to help companies increase compliance and respond quickly to legal and e-discovery concerns, and there are now previews of voice mails in Microsoft Outlook. It’s also very apparent that Microsoft officials are aware of the new kinds of competition that Exchange is facing.

It was clear from the product positioning that Microsoft is feeling the heat (GigaOm Pro, sub. req’d) from enterprise adoption of tools from Google (s goog), such as Gmail, many of which are free or available in low-cost versions for business use. Cisco (s csco) — a long-time Microsoft partner — is also taking aim at Microsoft Exchange with a new enterprise email service, WebEx Email. Steve Elop, president of Microsoft’s business solutions division, made numerous mentions of cost savings that enterprises can purportedly reap with Exchange 2010, and there was much focus on the email archiving and legal compliance features to be found in both it and Outlook 2010. Among cost-saving citations, Elop noted that companies can now run Exchange Server on lower-cost storage platforms than SANs.

Indeed, Google CEO Eric Schmidt has been very vocal recently about that company’s “next billion-dollar opportunities” when it comes to delivering web-hosted applications and other tools that can serve as alternatives to Microsoft’s solutions — and its licensing fees. In fact, many of Schmidt’s recent comments are decidedly anti-Microsoft.

No doubt with Google’s focus on online-hosted applications in mind, many new features in Exchange and Outlook are designed to allow email inboxes and archives to migrate easily between on-premise deployments and online-hosted ones. For example, a demonstration at the Berlin event included taking an existing on-premise email inbox and transferring it to a web-hosted implementation. Exchange Server is available now for trial use, here (Microsoft Silverlight req’d.).

Microsoft officials also announced that the company is acquiring SourceGear’s Teamprise technology. Teamprise allows Java and Eclipse developers to create applications with Microsoft’s Visual Studio. We’ll be on the lookout for more announcements slated to arrive at TechEd this week and will update you as they come in. Stay tuned.