Comcast, Microsoft team up to serve smaller firms

NEW YORK, Nov 13 (Reuters) - Comcast Corp CMCSA.O, the leading U.S. cable television operator, is teaming up with Microsoft Corp MSFT.O to offer a package of Internet-based communications products for small and medium-sized businesses.

The Microsoft Communications package, described as collaborative productivity tools, will provide small businesses with Internet-based corporate-class e-mail, calendar and document sharing for free to customers of Comcast Business’s high-speed Internet service.

Microsoft's move to offer the online software suite appears designed to compete with a similar offering from rival Google Inc GOOG.O known as Google Apps.

Comcast said the tools would provide a back-end IT service that small businesses typically cannot afford.

“In essence, we’re going to be performing some of those value-added IT-like functions that these customers have to contract out for externally or just do without altogether,” said Bill Stemper, president of Comcast Business Services.

Comcast, along with other cable companies, is expanding its business-class services to win customers from phone companies such as AT&T Inc T.N and Verizon Communications Inc VZ.N who dominate in providing businesses with voice and Internet services.

It is rolling out its digital phone service to small and medium-sized businesses to complement its Internet service.

Comcast has said it will spend more than $3 billion over five years to build out its business services, with most of the early focus on companies with five to 20 employees.

It is projecting Comcast Business revenue of $2.5 billion by 2011. It estimates its cable runs past 5 million small to medium-sized businesses and this year will invest about $250 million in capital expenditure to build out business services.

By the end of 2006 it was serving 250,000 such businesses. (Reporting by Yinka Adegoke)