Microsoft Launches Office 365 Cloud Beta

Microsoft is taking its next step into the cloud with the beta launch of Office 365, which combines Microsoft Office, SharePoint Online, Exchange Online and Lync Online into a unified cloud platform. The limited beta launch will take place among a few thousand companies in 13 countries and regions, with general availability expected in 2011.

Although Microsoft built its fortune as a desktop-centric entity, the company has recently embraced an “all in” cloud strategy. A major component of this strategy involves offering a variety of cloud-based IT services to corporations.

Meeting the challenge

The strategy comes at a time when Microsoft finds many of its traditional offerings challenged by Web-centric upstarts such as Salesforce.com and competing cloud products along the lines of Google Docs.

For businesses, Microsoft has previously articulated its cloud strategy in the form of its Business Productivity Online Suite (BPOS), which bundled products such as SharePoint Online. BPOS has now been rebranded Office 365, and given added capabilities that should remove all doubt about Microsoft’s intentions as a cloud-applications host.

“Office 365 is the best of everything we know about productivity, all in a single cloud service,” Kurt DelBene, president of Microsoft’s Office Division, wrote in a statement. “With Office 365, your local bakery can get enterprise-calibre software and services for the first time, while a multinational pharmaceutical company can reduce costs and more easily stay current with the latest innovations.”

For those smaller businesses with fewer than 25 employees, Microsoft plans on offering an Office 365 suite with Office Web Apps, Exchange Online, SharePoint Online and Lync Online for $6 per month.

Office 365 for enterprises will include more granular pricing options. For the monthly cost of $2 per user, midsize and large businesses can equip their people with basic email. More expensive options include Microsoft Office Professional Plus desktop software with email, voicemail, enterprise social networking, Web portals and other features for a monthly cost of $24 per user.

Those interested can sign up for the beta at Office365.com.

Microsoft’s plans for Office 365 over the next year include integration with Microsoft Dynamics CRM Online and an Education version of the platform tailored for school administration.

The challenge for Microsoft will be to maintain its cloud services’ reliability, particularly with businesses that have been traditionally skittish about the cloud. BPOS had previously experienced some outages, despite Microsoft’s attempts to strengthen its cloud offerings.

“When customers put their data into our system,” Microsoft CEO Steve Ballmer said during his keynote at the company’s Worldwide Partner Conference this summer, “when they entrust more and more of their data and operations to us, there’s the need to do a better job on reliability, security, privacy.”

However, Ballmer suggested at the time that Microsoft was capable of handling the job. “We have learned a lot through running Windows Live, Hotmail, Bing,” he told the audience. “These are some of the highest volume services run on the Internet today. When you run a highly scaled, highly dynamic service, you need a whole new approach to running a data centre.”