The recent Microsoft move of slashing the price of its Exchange Online email services, as well as building up some of its software-as-a-service offerings, clearly highlights the intensifying competition to offer the so-called "cloud" office applications to the users.

Microsoft's Business Productivity Online Suite (BPOS), which was earlier priced at a monthly cost of $15 per seat, will now sell at a monthly price of $10 per seat, for a five-seat minimum. In addition, the users will be able to access a wide array of services that are stored on the software company's own servers.

Along with the cut in the price of the BPOS - which offers hosted collaboration and communications software based on Microsoft Exchange Online, SharePoint Online, Office Communications Online and Office Live Meeting - Microsoft also intends expanding the service to 15 more countries later this week.

According to a statement released by Stephen Elop, the Microsoft Business Division president, the cut the BPOS price comes as result of the escalating customer adoption of the service; and is unrelated to Google's winning of the Los Angeles City contract.

Elop also announced that, after every three months, the BPOS will be upgraded with additional capabilities. Towards that end, Elop said that the coming quarter will see the storage capacity of the Exchange Online mail box being increased to 25 GB for standard service users.