Sage will initially focus on Europe with , a finance, CRM and business intelligence package, being developed in the UK and Spain.

The solutions will be compatible with Microsoft Office 365 and be rolled out to pilot sites in the coming months. The products will hit the market for general release in 2013.

"This is great news for our SMB customers who want both the best of on-premise applications and the benefits of the web. It is also very important for Sage because it shows momentum in the delivery of our web strategy and our commitment to a consistent technology and platform strategy," said Antoine Henry, Sage Europe's SMB market segment leader.

"A diverse eco-system requires more standards and the alliance provides this plus a direct way to engage with a whole range of Microsoft products. A fully featured platform as a service (PaaS) approach allows us to speed up development of domain specific customer applications, boost productivity, accelerate time to market and reduce duplication."

However, the deal has been criticised by Angela Eager, research director at analyst firm , who believes that the move still does not highlight a strong commitment by Sage to deliver a wide array of cloud products in the future.