Microsoft invests in another software hosting firm

The software maker sinks $5 million into Interland, which participates in Microsoft's Office rental application hosting program.

Microsoft today said it has made a $5 million investment in Web hosting firm Interland.

The Atlanta, Ga.-based firm will use the investment to develop products and services for the application hosting market, the companies said in a statement. Interland's efforts will be based on Microsoft's Windows NT and Windows 2000 operating systems.

Interland, which provides companies with hosting services ranging from supporting a Web site to establishing an e-commerce storefront, also participates in Microsoft's Office application rental program, announced in November. Under the program, customers access Microsoft's Word, Excel, PowerPoint and other Office software over the Internet, instead of installing the applications on their PCs.

Earlier this month, Microsoft put $10 million in Corio and with Compaq jointly invested $100 million in Digex. Both Corio and Digex are application service providers (ASP), companies that host and manage business software so customers don't have to do it themselves.

As part of today's deal, privately held Interland, which currently uses the Microsoft Windows NT server for about 70 percent of its hosting customers, will license to Microsoft Web hosting technology based on the Windows platform.

Additionally, Microsoft pledged to invest another $7.5 million in Interland should the company go public.