However, like other hosting partners, he said his company is taking it in stride, and thinks that Microsoft entering the market alerts customers to the business model Intermedia and other SaaS providers have supported for years.

"Partners will benefit from the market awareness that Microsoft can generate for the software-as-a-service delivery model," Sofinski said. He said that while today only 1 percent of deployed Exchange seats are hosted, he expects that rate to increase to 15 percent to 20 percent by 2012 through Microsoft's efforts to educate customers about hosted services.