Microsoft is not taking its move into cloud computing lightly. Office 365--the Redmond, Wash.-based software giant's formal entry into the cloud market--provides web-based versions of Microsoft Office software classics like Word, Excel and PowerPoint, along with other tools, for a flat monthly fee starting at $6 per user, per month. Office 365 has been in development for several years, and the stakes for the company--and for the more than 750 million Microsoft users worldwide--are high.
We caught up with John Betz, Microsoft's director of online services, to get the skinny on what web-based computing will mean to Microsoft--and to the businesses using it.
What is the current state of Microsoft's ‘cloudification' of small-business software?
As a company we are fully committed to cloud computing. We started out as an enterprise software provider, and with coming to the cloud, we see success there as well. We began with a few thousand businesses in our original beta starting last October. We now have more than 200,000 users, 70 percent of which are in a small business.
What are all those small businesses doing with the software?
It is all about looking professional and having the assurances that Microsoft is behind the product. It has been hard for small businesses to get what larger enterprises have in terms of functions. But for what small firms pay for a cup of coffee, they get all these things and more. It's an easy choice to make.
What are you finding in your beta that is not working well for businesses?
I would say stagnation. Too few companies have the modern tools. We find that often they use out-of-date gear, like the hand-me-down computer from home. So for many firms, going to work is like going back in time. There is no getting away from the fact that if you're going to use a 10-year-old machine it can be tough to get a terrific experience--not just with Office 365, but with any tool.
Microsoft is unique in online business software in that there is no widely deployed free product. So $6 a month per user is actually pricey. Are you getting push-back on pricing with Office 365?
Focusing on price is wrongheaded. Just because it is free does not mean it is good. The ability to have my own domain, automatically updated anti-virus, to have conferences quickly, to have a service-level guarantee and then the notion that Microsoft has my back--if you add all this up and do the math, it would far exceed $6 per user, per month.
Many small firms are beginning to feel cloud-based software is complex and tricky to use. What is Microsoft doing to reduce the confusion factor for small businesses trying to work on the web?
What you are hearing is just the sheer complexity of trying to do something with so many tools. Businesses are using word processing from one company, collaboration from another, security from another. Wrap them all up, it becomes less than free. If you give firms a simple tool that solves a problem for them, that frustration will go away. As a company we believe in supporting Office 365 on all devices, browsers and tools. And our job is to make that experience as easy as possible.
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This article was originally published in the September 2011 print edition of Entrepreneur with the headline: All Around the Cloud.
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Comments:
Planning a migration to Office365 is not simple or easy. We are a Microsoft partner and have deployed dozens of businesses and thousands of users to the Microsoft Cloud. With the right planning and migration strategy, the move can be done efficiently. The product is actually very, very good and it keeps getting better with each new feature rolled out. Anyone running an old email server should be moving to the cloud. The economics are finally solid. The service, reliability, and security are all ready for prime time with Microsoft...and we've deployed a ton of happy clients to prove it. Thinking of Google? Forget about it...Google doesn't even come close to Office365.
The on-ramp is a problem — we're struggling with it, and we're a reseller! From a business perspective we're still coming to grips with what this disintermediation, and understanding what it means for our business, and for our customers, from a lifetime TCO perspective. So far few people believe they could not get better availability from a discrete on-premise solution, but I expect that issues with availability will be resolved. But it IS interesting.
this product is a huge disappointment. It is so far short of the "conventional" on premise MS Office Products that it makes you ask "why not look at google apps". I am a bg (theoretical) cloud (and MS) fan , but this does not do enough,
I am finding that most of functions inside of Office 365 like the pivot table in excel are not available, making the program almost useless. Not sure I understand how businesses can even use this program.