As part of its push into the business services market, Comcast this week announced plans to offer Microsoft Communication Services to small and mid-sized businesses (SMBs). This Internet-hosted offering enables SMBs to share documents, access calendars, track tasks and use email, and it is based on Microsoft Exchange Server 2007, Microsoft Office Outlook 2007 and Microsoft Windows SharePoint Services 3.0. Michael O’Hara, general manager for the Communications Sector at Microsoft, spoke to Editor-in-Chief Carol Wilson about the partnership.

On Comcast’s use of Microsoft Communication Services: This is the first announcement with a major cable company. They are using the latest version of the software, and they are the first to go to market with it. Service providers have the opportunity to go after small to mid-sized business that want that rich functionality of email, scheduling, collaborating. They are doing this as software as a service, which very much fits in line with the model we now have going.

On the target market for these services: There are 4.5 million small businesses in their territory that are in the 20-and-under employees space. That’s a lot of potential customers for them out there. SMBs in that space is a great opportunity that no one has truly cracked really well. They don’t want to have an IT department. We call them no-IT or some-IT because they want to have everything taken care of for them.

On what Comcast is offering: The essence of the deal is that they are bundling four enterprise-class mailboxes and a SharePoint document collaboration site in with the broadband connectivity. This is a slightly different approach from what we’ve seen before. They are increasing the existing bundle to provide a greater value to the customer.

On Comcast as a customer: What we have seen out of Comcast is the most thorough preparation for taking an offer like this to market. I’m incredibly impressed by the way they are going about preparing for this. They have gone very aggressively around training sales staff, support staff, everyone. They have put thousands of hours of training into their staff. They are making a very serious effort – more so than I’ve seen from anyone else. They have really thought this through. They looked at the price points, how many mailboxes per second to bundle, what price to sell additional mailboxes for – they carefully thought through the evolution of this and where they are going to push it.

On the business model for partnering with service providers: The software is provided to them at a very reduced rate and we pick up a share of the revenues as they share the service. A hosted email box sold to a small to mid-sized business is about $10, and Microsoft picks up a $3 share on that. If the customer is not successful, we don’t get paid.