The world of hosted Exchange is about to get a lot bigger. This week in Hannover, Germany, Microsoft announced further developments on its “Software-plus-Services” initiative. The Business Productivity Online Suite will be available for trial runs for businesses of all sizes. Microsoft will also release Microsoft Office Communications Online, and the Business Productivity Online Deskless Worker Suite.

Microsoft’s Exchange Online and SharePoint Online were first announced last September for larger enterprises; they will now be available for any size business. Hosted Exchange of course isn’t anything new, and there have always been Microsoft hosting partners. The new service will be available both direct and through resellers, but there is some concern on the part of some hosting partners that Microsoft will cannibalize their business. The question is, whether you should use a hosted email service at all. As we’ve seen time and time again, the lowest common denominator of hosted email, the free services available such as Hotmail, have no place in the enterprise; and they definitely have no place in government agencies, where regulations demand accountability and archiving.

On-premises email does have numerous advantages in terms of security and control, but for smaller and SOHO businesses, the price advantage of the Software-plus-Services option may be the deciding factor. Microsoft Online Services is listing for $10 per user for Exchange Online, and $7.25 per user for SharePoint Online. For the most part though, the hosted solution can’t be seen as a replacement for an on-premises email server at the enterprise level, where the IT department can maintain control, and enjoy access to superior archiving facilities and third-party security controls. Microsoft’s press release for example, describes the “Deskless Worker Suite” as a solution for “occasional users;” many enterprises that deploy a hosted Exchange solution do so in conjuntion with an on-premise system as well.