When Cameron Chell, founder of Canadian strategy bank Chell.com, predicted Monday that industry heavyweights like Telstra Corp. (TLS) would eventually dominate the Australian Application Service Provider or ASP market, he probably wasn't expecting that dominance to come this soon. On Wednesday Telstra announced ASP trials that will see the ubiquitous Microsoft Office Suite offered to select Telstra customers under the "rentable application" model.

"This pilot program builds on Telstra's strengths and commitment to providing innovative business to business solutions and on its solid relationship with Microsoft," said Libbie Christie, managing director of Telstra eWorks. The Telstra trial is part of Microsoft's worldwide ASP trial.

If Microsoft fails to implement an effective ASP strategy its market dominance will be under threat from players like Sun Microsystems and Oracle Corp. In Australia both Sun and Oracle are currently working with budding ASP Thin Technologies. Telstra participation in Microsoft's ASP grand plan could be the difference between the software giant maintaining or losing its number 1 position in the Australian operating system market.

Telstra also announced a similar trial with IBM owned Lotus. Lotus applications Quickplace, Learningspace, Sametime and Smartsuite will be offered to select Telstra customers under the "rental application" model.

More on Telstra: The much hyped Telstra.com portal officially moved into phase 3 Thursday. John Rollands, managing director Telstra's online services division told Internet.com that Telstra.com is now more than a portal, "It's an online communication hub."

After re-evaluating customer needs on its flagship site, Telstra has made a number of adjustments. The interface is now simpler; the level of personalization available has been increased; the level of integration with mobile devices has also been improved; and there is more information available through the site.

The "telstra.com - It's your dot com" marketing campaign highlighting the new look and feel of Telstra.com will hit you from Sunday across all media. Telstra is using BMC Media to place its online advertisements.

Telstra stock (TLS) closed up 3.42% Thursday at Aus $7.84.

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