It hasn't been a good few months for the Exchange product team at Microsoft.  First the Outlook team ships an updated connector for Lotus Domino; then they dismantle their own roadmap; and now they are facing internal competition:

"Our first product here is going to be using Outlook that uses the Hotmail e-mail infrastructure. So you don't need to have an Exchange Server if you're a small business; you can just use Hotmail and you can have that synchronized experience, as well as the calendaring and everything else with other people who are on Hotmail."
I suppose some could see this as a defensive move against the low-end "good enough" mail servers, especially on Linux, but it also erodes the Exchange base -- at the end of the deployment spectrum where Exchange has its strongest presence.  What could be driving this, I wonder aloud....perhaps Exchange+Windows 2003+Office 2003 is too costly/complicated for low-end SMB customers to deploy?
Link: eWeek: Microsoft readies new hosted services for SMB >

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