Well, why not both? Exchange 2010 will allow customers to run a hybrid approach between cloud and premise based services. This is another feature that I find very intriguing. Microsoft has obviously made a huge splash wit BPOS (Microsoft Online). They have announced a few very large customers, and many smaller enterprises are moving to it or kicking the tires. Microsoft is looking to find a new source of annuity revenue to guard against the possibility of a major drop in their core Office and Server revenue streams. As Microsoft drives customers to BPOS, they know that many will be reluctant to give up their data to a 3rd party, especially one with such a checkered history of security issues. To combat this perception issue, Microsoft has come up with a very solid plan.
When Exchange 2010 becomes available, customers will be able to run it on-premise as well as via BPOS. What's the advantage? Well, there could be many. In one case, a customer could run the majority of their HQ or large offices on-premise, and use BPOS for remote and small sites. This offers them the control they desire, while off-loading the sites that are not cost-effective for dedicated equipment to a service provider. Another option would be to run Exchange in-house and use BPOS as your disaster site or external access method. Again, you're taking advantage or a provider utilizing shared resources to provide an ancillary service to your user base.
In the end, Microsoft is hoping to capture the lion's share of cloud based collaboration services (don't forget, OCS & MOSS are part of the BPOS package), as well as UC services. Once companies get used to the cloud and find it reliable, they won't look back. If they can then layer on additional services such as telephony, presence, and web conferencing, they'll really only look at one option. Microsoft's play in the cloud is very much like their play was for the desktop a few decades ago. Will they capture the 90% market share they have now? Almost certainly not. But if anyone is setup to dominate this market, it is Microsoft. I wouldn't be surprised to see the majority of their Exchange install base on BPOS within 5 years, and right there is a good 40% market share. That's not a bad start.