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An Inside Look at Cloud-Based Microsoft Office 365

September 19, 2011
URL: http://www.entrepreneur.com/article/220246

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 We find that often they use out-of-date gear, like the hand-me-down computer from home.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.