Mary-Jo Foley is writing a series of articles (see The road to Microsoft Office 365: The past, or The road to Office 365: The present) on how Microsoft Office 365 came to be:

The idea of a suite of Microsoft-hosted applications isn’t something new that the Softies dreamed up in response to Google Docs. Microsoft execs were pondering the possibilities of hosted applications as far back as 2003 to 2004, when Microsoft began making a handful of key strategic acquisitions in this arena.

Different business units at the company were pursuing parallel strategies. The reseller-channel-focused part of the company had fielded a hosted Exchange offering at the start of the decade, via which it was offering certain resellers and integrators the ability to resell to their users partner-hosted Microsoft Exchange. The Windows Live team had developed a hosted offering focused at the academic community, known as Live@edu. And the Office Live team had fashioned a small-business-centric set of Microsoft-hosted wares, known as Office Live Small Business (OLSB), which included e-mail, domain hosting and Web-site development tools...

I like Mary's even-handed approach in her stories.