"The government is always very careful with security," he stated, noting that New York's data is housed in a single-tenant environment. Microsoft is currently hosting core Office 365 components, such as email and SharePoint, but the state is currently negotiating additional pieces. Active Directory, Digman said, is "the next leg."
Another way New York employees will benefit is from Office 365's automatic access to the newest versions of Microsoft's productivity applications, noted Digman.
"With every version, Microsoft seems to expand the capability to analyze data, and to move it from product to product," he said of new features such as Power BI. He said state agencies have been interested in using these features to deliver data and insight at a faster rate, and that they will also benefit from a predictable and consistent upgrade cycle.
He said Office 365 even allows the state to milk the last bit of productivity out of aging computers. Digman said that many machines that struggle with processing power can offset some of the burden to Microsoft's servers by running Office in the cloud. "It's another benefit that's hard to measure," he said.
One thing that's not hard to measure: Office 365's momentum. In July, the company announced that the product was on pace for $1.5 billion in annual revenue, a 50% improvement from its pace earlier in the year. Because Office 365 is a subscription-based service, this profit stream is perpetual and thus more attractive, in Microsoft's view, than traditional standalone licenses. North American government customers who have recently signed up for Office 365 include the cities of San Francisco, San Jose, Kansas City, Seattle and Chicago, as well as the county of Santa Clara, which is home to Silicon Valley, and the state of Texas.
The company also can boast of Office 365 success stories with businesses of all sizes while fending off further encroachment from Google. Additionally, with many Office 365 installations running on Windows Azure or a combination of Azure and a company's private servers, the product has boosted not only Office sales but also the adoption and reputation of Microsoft's cloud infrastructure as well. Microsoft hopes that Office and Azure both will reinforce the appeal of its increasingly cloud-focused Microsoft Server products.
Microsoft has had less success selling Office 365 to consumers. This fact has only added to the debate about whether the company should release a version of Office optimized for iPads. The company offers Office 365 subscribers a version of Office that runs on iOS and Android phones, but it has declined to produce a tablet-oriented version for either platform. The plan is ostensibly intended to increase the appeal of Windows 8.