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If you want to see how Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG) are competing in the software as a service (SaaS) market, head back to college. Several other large colleges have embraced Google Apps to manage student email, alumni email and collaboration. Now, Microsoft is taking steps to more actively promote its rival hosted software offering: Live@edu hosted applications.

Indeed, Microsoft says it is adding “no-cost Microsoft Exchange Labs e-mail for students and alumni to ites Live@edu platform.”

Microsoft claims Live@edu offers four key benefits to students and alumni:

  1. Reliable, hosted email featuring up to 10GB inboxes and 20MB attachments. The software giant is quick to note that students can access hosted Exchange from non-PC devices, such as smart phones.
  2. Shared calendars for improved collaboration.
  3. Message tracking and content filtering to block questionable content.
  4. School branding for all inboxes, and those inboxes can follow a person from student life to post-graduate and alumni status.

Frankly, Microsoft’s approach sounds similar to Google Apps deployments at Hofstra University and other universities. I don’t know whether Google or Microsoft has the better hosted collaboration solution, but that’s not the point of this blog entry.

Back to School

Rather, here’s the key takeaway: Investors should keep a close eye on university IT deployments to see where Microsoft, Google, IBM, Sun Microsystems, Cisco Systems and other big IT providers are heading next.

Often, next-generation IT solutions — including hosted services — land on college campuses long before they reach other vertical markets. Also, students are among the most demanding customer base in the world. As students adopt new types of smart phones and Internet-enabled devices, they often invent new uses for hardware, software and SaaS that vendors never considered.

With college-centric SaaS, Google and Microsoft are battling for the hearts and minds of tomorrow’s workforce.

Disclosure: none

Source: Microsoft vs. Google Apps on College Campuses