Microsoft Launches Cloud Suite, Office 365

Microsoft CEO Steve Ballmer has kicked off the official launch of Office 365, Microsoft’s cloud-based productivity software, in the same event space Redmond used for Windows 7’s debut in October 2009.

As with Windows 7, a lot is riding on Office 365’s ability to appeal to both consumers and businesses.

Microsoft is very publicly “all in” with the cloud, a strategy that a high-profile misfire would call into doubt. Microsoft also views Office 365 as a way to extend its long-running Office franchise beyond the desktop and into the online realm, where it faces a determined competitor in the form of Google.

Collaboration Tool

A rebranding of the company’s BPOS (Business Productivity Online Suite), Office 365 links Microsoft Office, SharePoint Online, Exchange Online and Lync Online into a platform that costs between $2 (£1.25) and $27 (£16.87) per user per month. On top of that, Microsoft is offering an Office 365 Marketplace with productivity apps and professional services.

“We believe effective collaboration is a lot more than good group dynamics,” Microsoft CEO Steve Ballmer told the audience of media, analysts and business owners at the launch here. “It’s instant access to relevant information… and the right people taking the right action at the right time.”

Ballmer’s presentation, backed by a handful of Microsoft executives, emphasised the platform’s interoperability across multiple devices, including smartphones. For example, a photograph taken with a Windows Phone’s camera can be ported, almost instantly, into a cloud-based document on a nearby laptop running the cloud-based version of Office. Video conferencing is also a focus.

Ballmer also emphasised Office 365’s benefits for small- to midsize businesses, which he called the segment “responsible for two-thirds of global job growth.” He went on to claim that Microsoft’s cloud-based platform will give those businesses “an edge” in competing, without the burden of complex on-premises systems.

Office Domination

Traditional desktop-bound Office dominates the majority of business IT environments. Near the end of 2010, research firm Gartner asked some 204 IT pros about their businesses’ productivity software, then used that data in a research note that estimated, in part, the Office install base. Office 2003 and 2007 dominated the list with a respective 33 percent and 41 percent share, while Office 2010 followed with 24 percent.

“The survey was taken at the Gartner Symposium in October, so respondents are not representative of smaller organisations, where we believe Google Apps is more popular,” Gartner analyst Michael Silver told eWEEK 18 May. “Less than 1 percent are using Google Docs now and about 2 percent will be using it by [year-end 2011]. Moreover, most organisations are still using it in addition to Office and not to replace all their Microsoft Office licenses.”

Whatever its market share in online productivity software, Google will surely fight to hold it as Microsoft rolls out Office 365. “You can’t just take legacy, desktop software, move some of it to a data center and call it ‘cloud,’” Shan Sinha, Google Apps’ product manager, wrote in a 27 June posting on the Official Google Enterprise Blog. “Apps was born for the Web and we’ve been serving hundreds of millions of users for years.”