Microsoft made a big splash today with the launch of Office 365, it’s cloud offering combining Office applications with programs such as Exchange, SharePoint and Lync. But we felt the 30-minute Web cast left a number of questions unanswered that we’d like to try to tackle.
Here’s what we know:
Office 365 will be available sometime next year for $6 per user per month, although customers can sign up for a beta version today. Microsoft executives at a launch event in San Francisco made a point of saying that offering Office 365 as a cloud service brings enterprise level technology to the smallest of businesses. A flower shop, a small design firm, or an organic restaurant can use Exchange for e-mail, SharePoint for collaboration and Lync (formely Microsoft Unified Communications Server) for combining video and audio conferencing, IM, text and other communications technology.
Large enterprises can also benefit from Office 365 by saving the company in IT costs if Microsoft essentially runs their productivity apps for them. Customers have told Microsoft that they could save from 10 percent to 50 percent on their IT budget by moving their productivity infrastructure to the cloud, said Chris Capossela, senior vice president of marketing for Microsoft’s Office Division.
More of the basics are covered in this report from IDG News Service's Juan Carlos Perez while Network World’s Jon Brodkin reports on how Office 365 will compete against Google Apps in the cloud. But I asked Microsoft a few followup questions.
Q: Wither BPOS? The Microsoft Business Productivity Online Suite is a set of productivity apps Microsoft already offers as a cloud service. What happens to that?
A: “BPOS will be available until Office 365 launches next year,” Microsoft responded by e-mail through its public relations firm. “Customers can purchase BPOS or Live Meeting standalone until Office 365 launches next year. BPOS is the best way to get on the path to Office 365, so we encourage customers, who are ready to deploy today, to take advantage of these services now. Customers can select their own transition time within a one-year window.”
Q: Microsoft said subscribers to Office 365 can also download a client side version of Office Pro Plus onto their PCs. What’s included in that?
A: “Office Professional Plus can be purchased standalone or as an add-on to any Office 365 offering for $12 per user per month. It includes Word 2010, Excel 2010, PowerPoint 2010, Outlook with Business Contact Manager, OneNote 2010, Publisher 2010, Access 2010, InfoPath 2010 and Office Web Apps.”
Q: What’s the strategy behind offering on-premise software along with a cloud offering?
A: “Office 365 provides a new way to get and use Office Professional Plus desktop software on a per user pay-as-you-go basis. In several years of experience, customers tell they really like BPOS, but they love BPOS and Office working together.
Microsoft also shared with us some system requirements for Office 365.
Oodles of more information about Office 365 is online on a Microsoft site that went live just today.
Initial reaction to the launch has been positive, although Network World’s Brodkin notes the offering as of "only a limited Web-based version of Microsoft Office."
Microsoft channel partner Intermedia praised the launch. “Finally, Microsoft has delivered an offering that has the potential to become a Google-beater,” said Serguei Sofinski, CEO of Intermedia, in a prepared statement. “As a low-cost cloud service for the smallest companies, it’s more compelling than Google Apps and is a big step in the right direction.”
But for Intermedia, one other question about Office 365 remains unanswered. What role will channel partners have in selling Office 365?
Intermedia is a reseller of Microsoft Exchange, SharePoint, Office and other Microsoft applications in the cloud along with its own management services, although not of BPOS, an Intermedia spokesman said via e-mail. Sofinski said in his statement that Microsoft has both worked with and competed against channel partners for customers.
“We believe that the channel model is Microsoft’s greatest advantage in addressing the large segments of the market that require full support and integration outside the Microsoft product line," he said, citing as examples BlackBerry smartphone and VOIP business grade phone service. He also emphasized that many managed service providers connecting customers to the cloud want to own the customer relationship directly without Microsoft cutting in.
It sounds like Microsoft is going to have to move delicately to promote Office 365 without alienating partners, though it seems to me an issue like this has probably come up before.
Robert Mullins is a freelance journalist based in San Francisco. He has been writing about technology from Silicon Valley for more than a decade. He has covered such beats as network security, servers, storage, software development, telecommunications and, of course, Microsoft, for a variety of publications, most notably the IDG News Service and Network World.