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Summary:

Microsoft has now launched Office 365, its suite of collaboration and office tools that aims to take on Google Apps for Business. But with a product that costs more than Google’s offering and is coming much later to market, will Office 365 be a success?

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At a press event in New York on Tuesday, Microsoft CEO Steve Ballmer officially launched Office 365, the Redmond software giant’s suite of online collaboration and office tools. It includes Office Web Apps and hosted versions of SharePoint Online, Exchange Online and Lync Online. It also has a feature set that aims to take on Google Apps for Business. But with a product that costs more than Google’s offering and that’s coming much later to market, will Office 365 be a success?

Office 365 is not Microsoft’s first attempt at offering this kind of service; it has previously offered hosted Exchange and SharePoint services with BPOS (Business Productivity Online Services). But by including Office Web Apps in Office 365, the company now has a much more rounded product that enables users to do their work anywhere, on any device, and to easily collaborate with others.

Office 365 vs. Google Apps for Business

One of Office 365’s main advantages over Google Apps is the huge existing installed user base of Office products. Office is entrenched in the majority of businesses worldwide, and Office 365 offers an easy pathway for those users to migrate to cloud collaboration while using familiar tools. Office 365 also has a greater range of features than Google Apps, incorporating office productivity (Office and Office Web Apps), collaboration and intranet tools (SharePoint Online), email and calendars (Exchange Online) and instant messaging and web conferencing (Lync Online).

Unlike some previous Microsoft releases, Office 365 works cross-platform, so it can be accessed equally via Mac and PC and on mobile devices — although there are reports that mobile access from some devices is limited. Office Web Apps, in particular, is an impressive suite of products, and while they aren’t complete cloud-based replacements for the desktop Office apps — they don’t offer the full range of functionality that desktop apps do — Microsoft obviously invested a lot of effort in making the user experience very similar. The interface is familiar, and documents look identical in Office Web Apps and in the desktop applications. By enabling seamless round-trip working between Office Web Apps and Office desktop applications, Office 365 can also work when users are offline, something that can’t be said of Google Apps.

Of course, Google believes that its product is superior. On Monday, in a post titled “365 reasons to consider Google Apps” on the official Google Enterprise blog, Google Apps Product Manager Shan Sinha aimed a few barbs at Office 365, saying that it is designed for usage by individuals, not by teams; that its pricing is complex; and that Office 365 doesn’t have proven cloud reliability, while Google Apps has a record of 99.9 percent uptime. Some of Sinha’s points are debatable: Office 365 does enable co-editing and collaboration, for example, and Microsoft has plenty of experience in offering cloud-based services, even if Office 365 itself is new.

Easy migration to cloud productivity for existing Office users

With its higher price point, Office 365 might not tempt existing corporate users of Google Apps for Business away, particularly as migrating between the two services is unlikely to be straightforward. However, that’s probably not the market that Microsoft is aiming at. Rather, it wants to keep hold of the huge numbers of business customers with existing investments in the Office product line. For them, Office 365 is a well-designed product that offers an easy migration route to cloud-based office productivity at a reasonable price point with products that will feel very familiar to their users. I think that will make Office 365 a compelling proposition for many business customers, in particular smaller businesses that would like to offer their employees the ability to work and collaborate remotely using familiar Microsoft tools but don’t want to have to make an upfront investment in, and then maintain, their own SharePoint and Exchange servers.

Office 365 is available on a number of different plans, starting at around $6 per user per month for small businesses with less than 25 users; enterprise customers have access to plans including dedicated support. For comparison, Google Apps for Business costs around $4 per month.

  1. Om, my company is the ideal example of a small company that would migrate to 365.

    We looked at Google but dreaded migrating docs, contacts, email messages, etc.

    If 365 works as advertised, we’re in.

    Thanks for the overview.

    George Tsiolis
    Founder
    AGORACOM

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    1. Yes, I think this product is particularly suited for smaller companies (larger firms will likely already have their own Exchange and Sharepoint servers). You can sign up for a trial at the 365 site if you’d like to check it out for yourself.

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  2. If Google Apps were 100% seamless with legacy MS Office documents then the switch might be easier. Compatibility is a big reason for many IT shops to choose 365 at this point from my own tests.

    However, I do like the fact that third party platforms like box.net interoperate with Google Docs; that’s impressive and very functional with little user training required. Google may also have better mobile support at this point for iPad and iPhone users not to mention Android. Again, it’s not an either or choice yet. Both have their strengths. The competition is good though for users and the market.

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    1. Agreed! Perhaps getting the display/compatibility of documents accurate in Office Web Apps was one of the reasons releasing it took so long, but it’s critical for its success — so many legacy documents to deal with.

      Re: third-party integrations, Microsoft is trying to develop its own marketplace for third-party apps, so you can probably expect to see more third-party vendors working with 365 soon. That said, Google has a massive headstart in this regard.

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