Salesforce.com's chief executive Marc Benioff has encouraged businesses to adopt hosted email and collaboration from Google and dump Microsoft.

Announcing AppExchange OEM Edition in San Francisco, Benioff pointed the audience to Google.com/hosted as an example of an online service that provides the functionality of client/server software without the hassle of installation or updates.

Google's service - which unlike its other so-called "betas" is beta to the point where Google is still screening potential users - bundles up hosted email with 2GB of storage, Google Chat and calendars that are registered to a user's domain.

"This is outrageous... [this is] Gmail for our domain," Benioff exclaimed. "I can't wait to get my Outlook server out of my company. It's really unbelievable what it does and how bad it is. Google does a much better job of managing email than I do at my company."

Benioff went on: "The amazing thing is Google and Yahoo! and soon Hotmail you can run in your company as a service with your name assigned to it."

Salesforce.com's chief executive was joined on stage at the AppExchange launch by Google's point man on the enterprise Dave Girouard who played down Google/hosted. "The hosted Gmail stuff is very, very early on... we are focused on search first," Girouard, vice president and general manager of enterprise, said.

Given Microsoft's foray into "live services," Gmail/hosted would also appear to go beyond simply replacing Outlook and Exchange by also offering a challenge to Microsoft's Office Live. Amid the, frankly, unoriginal services offered on the Office Live beta is hosting, email and collaboration - with collaboration to be charged at $29.95 per month once launched, according to Microsoft.®

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