Microsoft: Office 365 a hit, especially with small businesses

More than 90% of the Office 365 customer base currently is made up of small businesses

Office 365, Microsoft's cloud collaboration and communication suite for organizations, is selling eight times faster than its predecessor, the Business Productivity Online Suite (BPOS) and has been particularly successful among small businesses, which make up over 90 percent of its customer base, the company announced on Tuesday.

"We're seeing tremendous upside on the small business side," said Takeshi Numoto, corporate vice president of the Microsoft Office Division, in an interview.

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Microsoft also said it is making Office 365 available to try in 22 new markets, including Argentina, Taiwan and South Africa, as well as rolling out more than 30 product enhancements to the suite. At its current rate of adoption, Office 365 is poised to be one of the company's fastest-growing products ever, according to Microsoft.

For now, customers in the 22 new markets will get access to a 30-day free trial, but Microsoft hopes to soon make it possible for them to transition to a standard, paid license, as is possible in the 41 other existing markets, Numoto said.

With its availability in these 63 markets, Office 365 now reaches more than 95 percent of business customers globally, he said.

Office 365, launched in June, includes online versions of Exchange, SharePoint, Office and Lync hosted in Microsoft data centers, and is priced on a per user, per month subscription basis. It comes in several different packages that include an email-only plan that costs $4 per user per month, a fully-loaded suite with Lync Server on premises and Office 2010 Professional Plus for $27 per user per month, and a version for small businesses with 25 or fewer users that costs $6 per user per month.

"We launched it five months ago, so it's early days, but the momentum we're seeing in the market has been incredible," Numoto said.

Office 365 is considered a much stronger competitor than BPOS to Google Apps, a very similar cloud collaboration and communication suite for organizations that includes email, IM, calendar, office productivity software and other Google applications.

In addition to the small business take-up, Microsoft also touted enterprise customer wins for Office 365, including the Campbell Soup Company and French magazine publisher Groupe Marie-Claire.

Among the product enhancements announced for Office 365 are support for Windows Phone 7.5 for the SharePoint Online component of the suite, so that users can access and update documents from their mobile device, as well as new links for connecting SharePoint to line-of-business applications, like CRM software and SAP applications, Microsoft said.

Although the on-premise version of SharePoint already had this Business Connectivity Services (BCS) feature, SharePoint Online didn't, so now for the first time customers will be able to surface data from business applications on SharePoint Online, Numoto said.

Other upgrades announced on Tuesday include several intended to simplify and automate the implementation and IT management of Office 365, including the ability for administrators to reset their own password via text message and an alternate email address, and the release of a new 64-bit directory synchronization tool. Also new is a "do it yourself" troubleshooting tool designed to guide users in solving issues before they submit a support ticket.

Although not part of this announcement, Microsoft remains committed to providing access to Lync Online from Windows Phone, Android and iOS mobile devices before the end of this calendar year, Numoto said.

Microsoft also announced improvements in its SkyDrive cloud storage service, which is separate from Office 365 and designed mostly for individuals what want to store their Office files in Microsoft data center servers, and share them with other users. Specifically, Microsoft said it has simplified Office file sharing via SkyDrive, as well as the upload process.

Juan Carlos Perez covers search, social media, online advertising, e-commerce, web application development, enterprise cloud collaboration suites and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.

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