Microsoft Office 365 (the cloud platform for Exchange Online, SharePoint Online and Lync Online) turns one year old this month. And generally speaking, Talkin' Cloud believes it has been a good first year for Office 365 -- though there's still room for improvement.
So what's right (and wrong) with Office 365 so far?
Office 365's Upside
On the plus side Microsoft nailed Office 365's branding and steadily improved its reliability. Office 365's predecessor, called BPOS (Business Productivity Online Suite), suffered numerous high-profile crashes. And the clunky BPOS brand never quite caught on with customers.
Shifting to Office 365's architecture and brand boosted reliability (generally speaking). The move also linked a familiar name (Microsoft Office) with a term that communicated always-on capabilities (365). Admittedly, Office 365 has had its share of crashes in the past year but generally speaking it seems like Microsoft has taken its cloud reliability up a few notches throughout the first half of 2012.
Moreover, Microsoft has successfully pushed Office 365 into small business, while also enhancing the cloud suite for schools, colleges and government organizations. Among the milestones and deployments worth noting:
- Partner Programs:Microsoft Cloud Essentials and Cloud Accelerate -- two key partner programs -- have enjoyed considerable growth.
- Partner Wins: Some partners seem to be profiting from Office 365. For instance, Computer Sciences Corp. is deploying Office 365 for the the FAA (Federal Aviation Administration). Quest Software has been positioning itself as a Microsoft Office 365 cloud migration leader for customers that need guidance. And Infinity Technology Solutions has identified at least five overlooked profit opportunities involving Office 365.
- Mass Adoption: Channel Chief Jon Roskill in March 2012 dropped hints that the company believes it has become the world's biggest cloud software company. Neither Roskill nor Microsoft have disclosed specific Office 365 deployment stats. But its safe to say the suite's installed base is growing fast.
Office 365 Challenges
Still, Office 365 also faces some steep challenges. Chief among them...
- Google Apps: Okay, that was the obvious one. But there's no denying Google Apps momentum in multiple vertical markets. And next-generation cloud consulting firms like Cloud Sherpas have bet their businesses on Google's cloud suite.
- Price Wars: The cloud software wars have barely started but Microsoft has been cutting Office 365 and Windows Azure prices in 2012. If prices are falling now, how low will they go in 2013 and beyond?
- Partner Concerns: Sure, some partners now back Office 365. But there's a big problem a lot of folks overlook: Each time Microsoft announces an Office 365 victory, the news typically lacks partner information. In stark contrast, the vast majority of Google Apps wins describe the cloud consulting firm involved in the deal. That's right: In some cases, Google is making more noise about its cloud channel partners than Microsoft. And that's not acceptable in the Microsoft channel.
- Who Bills the End-Customer?: Actually this has become less of a concern over the past year -- but I still can't ignore it. Some partners want to control end-customer billing for Office 365. But Microsoft only allows syndication partners (a very small pool of Office 365 service providers) to manage end-customer billing. This is a non-issue for numerous partners that simply aren't equipped to oversee cloud billing. But a small, vocal group of partners are hoping Microsoft changes its tune on cloud services billing.
- Office 365 Marketplace: Microsoft's portal for finding cloud deployment partners and application partners hasn't really taken off. Whether you consider it an App store or a mall for finding cloud consultants, the Office 365 Marketplace hasn't generated any noise.
Bottom line: Office 365 has been a welcome successor to BPOS (Business Productivity Online Suite). But Microsoft's TOP cloud challenge remains unchanged -- and it ain't Google Apps, though Google certainly is a mighty rival. The real challenge for Microsoft involves engaging channel partners and then promoting channel-led Office 365 wins.
Far too often, Microsoft Office 365 victories lack any partner mention at all. It makes me wonder: Just how many Office 365 deals actually involve channel partners?