With Google Apps Education Edition gaining market traction in thousands of universities across the country, Microsoft can ill afford to rest on its lofty on-premises software laurels, eWeek reports–so the software giant, looking to make inroads against Google Apps in the software-as-a-service market, on May 27 said it is providing its Microsoft Exchange Labs hosted eMail applications free of charge for college students and alumni. Microsoft Exchange Labs is now part of Live@edu, a Microsoft R&D communications and collaboration project based on Microsoft Exchange Server. An alternative to the education editions of Google Apps and Yahoo’s Zimbra eMail service, Microsoft Live@edu includes Windows Live Hotmail, Windows Live Messenger, Microsoft Office Live Workspace, and Windows Live SkyDrive online storage, which lets users share documents and photos. Students can use these tools to communicate with each other and teachers through eMail and instant messaging. Students also can use Live@edu to complete coursework solo or to collaborate on group projects using the Microsoft Word, Excel, and PowerPoint applications in Office Live Workspace. Since Live@edu launched in March 2005, 2,000 universities and colleges in 86 countries have enrolled in the program. Google claims millions of students and faculty at more than 6,000 universities are using its Google Apps for Education…

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