Microsoft is rapidly moving Office to an Internet app that will run in a browser. It is called Office 365. It’s a huge part of Microsoft’s all-in cloud strategy.
Office 365 was introduced in limited beta last year, bringing together Microsoft Office, SharePoint Online, Exchange Online and Lync Online in an always-up-to-date cloud service. Today Microsoft announced it’s moved to a public beta of Office 365 – available now in a total of 38 markets and 17 languages. A trial account can be requested at http://www.Office365.com.
Wait there is more! Microsoft also announced the Office 365 Marketplace today, giving customers a simple way to find partner apps and services for Office 365. The Marketplace is now live at http://www.Office365.com with 100 apps and 400 professional services available from the established community of more than 16,000 Microsoft cloud partners – with new apps and services to be added over time.
Office 365 will launch worldwide later this year.
But why?
Microsoft Office is a big reason to buy Windows. Because Microsoft makes Office for the Mac, it makes the Mac a viable business alternative to Windows. The lack of Office for Linux makes Linux a less viable alternative. Web apps don’t generally favor one platform over another – so why would Microsoft take its most powerful application and make it platform independent?
I don’t know. But a few ideas come to mind.
1) The obvious strategy is to gain cloud leadership. Office is a big cash cow now and disrupting that cash flow is a courageous move unless they believe something else will disrupt it for them. The only viable contender is Google Apps. Although Google Apps is still behind Office, it’s reasonable to assume that gap will continue to narrow.
2) Along those lines, Google Apps does some have strong collaboration features over Office and SharePoint. Google Apps were designed for the cloud and Microsoft needs to close that part of the gap where Google has the advantage. If Microsoft prices Office 365 comparable to Google Apps – it’s a huge blow to Google Apps which not only competes with Office, but SharePoint and Exchange too.
3) Cloud services offers Microsoft the potential to far better understand how customers are using its software. Google knows things like which features are the most popular, what items are searched the most in help, the average length of documents, the reading level of documents, and much more. These examples represent aggregated totals, a liberal terms of service agreement could provide individual information such as keywords for targeted advertising. It could also be used to personalize other Microsoft services such as Bing.
4) Piracy is far easier to control in a hosted environment. Access requires current credentials, not just software.
5) Other Apps: SharePoint and Lync are riding on the successful coattails of Office. Bundling these services with a low initial cost could greatly expand the usage and commitment to these other applications – particularly with medium and small businesses.
6) Browser Wars: Microsoft claims Office 365 will work with multiple browsers – for now. But there is merit to ‘he who controls the browser, controls the web.’ IE market share continues to fall – Apple, Mozilla, and Google all make strong browsers. Should Office 365 prove to be popular, Microsoft could extend advanced features to IE only.
7) Mobile. Along the lines of the browser wars – Microsoft has some catching-up to do on Windows Phone 7. Microsoft’s policy of First and Best on Windows could mean that Phone 7 and future tablet versions are optimized for Office 365. While Office is available on the Mac, the Touch and iPad is a different story – these devices can easily read Office docs, but not edit them.
8) Lync. Microsoft Lync is gaining considerable traction for large enterprises, but it is a complex product – highly unreasonable for small offices. The last time Microsoft targeted small office was with ResponsePoint which didn’t make a lot of sense. ResponsePoint had nothing in common with Lync (or OCS) – phones were incompatible and ResponsePoint could not be integrated with Exchange (even Small Business Server edition). A hosted offering makes much more sense – the complexity is hidden as a service, the devices (headsets, phones, etc.) will work for all users, and one architecture/solution for Microsoft and its developer partners to leverage and optimize.
Initially Lync will not be supported for PSTN access, but I suspect that either Microsoft or third party partners will fill that hole within a year.
9) Xbox. Microsoft has already demonstrated how Xbox Kinect can be used with Lync – why stop there? There are lots of Xbox systems out there. It isn’t hard to edit a Word document on a TV screen already – Xbox Gold is a subscription service already that expands the usefulness of the Xbox system for a fee. Office 365 could easily become an Xbox app. Google plans to release hardware based solutions such as the Chrome device, but Microsoft has a huge installed base of Xbox systems already connected to large screen TVs.
10) Amazon Defense. Amazon is a powerful competitor. It just recently flexed its muscles with its own Android store (against Google) and its Cloud Locker (against Apple/iTunes). It’s cloud services (AWS and EC2) are already an alternative to Windows server licenses. If Microsoft doesn’t host Office, someone else will.
11) The Office 365 Marketplace provides Microsoft a way to cash-in on third party applets for Office. This falls into the lessons learned category. Office has graduated to a full development platform now complete with retail distribution and revenue sharing.
Those are my thoughts. I’m sure I missed a few obvious ones too. The good news is that I think Office 365 is a winning strategy for end users and enterprises. I’m a big fan of Google Docs, primarily because of its rich collaboration features. I’m also a big fan of choice and competition. Let the games begin.
(Cross-posted @ TalkingPointz)
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