Microsoft is making an economic pitch for its services.

"In this environment, more so than ever, customers are looking to services as a way to address some of the economic concerns that exist," said John Betz, director of Microsoft Online. "... They can take advantage of the economies of scale that we're offering in the Microsoft data center."

Companies can save 10 percent over running the same Microsoft software on its own servers and up to 50 percent if Microsoft Online replaces legacy systems, he said. The savings come from lower server hardware and software costs, and less demand on IT staff to maintain those systems.

Microsoft is offering customers a "three nines" service level agreement (that's 99.9 percent up time) backed by financial guarantees, Betz said. "We're doing that through a network of highly secure and geographically redundant data centers," he said.

About 18,000 organizations participated in the beta, Betz said, and Microsoft now counts 500,000 seats, sold in the past year, in large corporations using Exchange or SharePoint online. Microsoft announced its corporate online services strategy in October 2007.

It set pricing for the services in July, ranging from $3 to $15 per user, per month.

Microsoft Online can now be used in a production environment by companies with as few as five users, Betz said.

Microsoft is emphasizing the choice it offers its business customers, which Betz said distinguishes the company's approach from other software as a service players. Microsoft's mantra is "software plus services."

"They've always been able to run our servers in their own environment. What online services does is give them a choice in how they consume it," Betz said.