Office 365: Microsoft Pitches Cloud, Eyes Profit

CEO Ballmer talks up advantages for small and midsize companies at Office 365's launch--not the cloud threat to Microsoft's lucrative on-premises enterprise software.
Office 365 Vs. Google Apps: Top 10 Enterprise Concerns
Office 365 Vs. Google Apps: Top 10 Enterprise Concerns
(click image for larger view and forslideshow)
Microsoft itself has been bringing customers online through conventional hosting and its BPOS service, but Office 365 is expected to quickly expand that business. More than 100,000 customers are testing the Office 365 beta, and more than 70% are said to be small or midsize companies. As of Tuesday, Office 365 emerges from beta and will be available in 40 major markets globally.

A key feature in Office 365 that BPOS lacked is Web-based Office apps that look and act like Outlook, Word, Excel, PowerPoint, and the other components of the Office suite (with licenses to the actual, device-installed Office software available as an upgrade to the Office 365 subscription). As demonstrated at Tuesday's launch event, the layouts of the Web-based clients mimic Microsoft's PC-installed software, and when you right-click on files and menu options, you get much the same functionality.

Familiarity of Office interfaces and workflows is a key selling point for Microsoft, one cited by Office 365 customer Robert Taylor, IT director at Hendrick Automotive Group. Hendrick has more than 7,000 employees across 75 dealerships.

In an interview with InformationWeek, Taylor said his users have plenty of interactions with Excel spreadsheets and Word documents that are generated, ingested, and otherwise integrated with Hendrick's customer relationship management (CRM) and financial reporting systems. With Office 365's Web apps, Taylor said users won't be forced to use unfamiliar tools, and integrations with mission-critical applications won't break.

Lee-Bourke of Wise Group said Office 365 offers better IT administrative control than the BPOS service he has used for two years and "revolutionary" support for collaboration among the firm's 500 employees. "The presence element pervades everything you do, so it puts the focus of the product on people," he said.

Lync presence awareness reveals who's online and available for instant messaging, who's on the phone, and, through Office 365 integrations with Exchange Online, who's available for meetings and who's out of the office.

There were plenty of small businesses represented at the Office 365 launch, but the larger companies had no less zeal to reduce software, hardware, and IT labor cost.

You can't afford to keep operating without redundancy for critical systems--but business units must prioritize before IT begins implementation. Also in the new, all-digital InformationWeek SMB supplement: Avoid the direct-attached storage trap. Download it now. (Free registration required.)

Editor's Choice
Samuel Greengard, Contributing Reporter
Cynthia Harvey, Freelance Journalist, InformationWeek
Carrie Pallardy, Contributing Reporter
John Edwards, Technology Journalist & Author
Astrid Gobardhan, Data Privacy Officer, VFS Global
Sara Peters, Editor-in-Chief, InformationWeek / Network Computing