Microsoft & Azaleos Cloud Research: Office 365 Reality Check

Microsoft (MSFT) and Azaleos have each unveiled the results of separate cloud computing studies. While Microsoft is indirectly banging the drum for Office 365, Azaleos is attempting to position managed services and private cloud deployments as ideal alternative to Office 365 cloud services.

Comparing the two cloud research reports offers managed services providers and cloud services providers a timely reality check about the future of IT services — both on-premises and in the cloud.

Microsoft Cloud Research Findings

Among the factoids worth noting:

• Small businesses will double their paid cloud services over the next five years, while the world’s smallest companies already running paid cloud services will triple in the next three years, Microsoft claims. The Microsoft research, conducted by Edge Strategies, covers more than 3,000 SMBs in 13 countries
• Also of note, 63 percent of SMBs using cloud services today expect to grow in sales in the next 12–18 months while 55 percent believe technology will power their growth.

Read between the lines and Microsoft is indirectly stating that demand for Office 365 should continue to grow within small businesses. And indeed, Talkin’ Cloud agrees with that general statement.

Azaleos Research Findings

Now here’s the twist: Azaleos, a managed services provider focused mostly on Microsoft-oriented environments, has released a separate report that suggests private cloud collaboration and managed services can be more affordable than Office 365.

According to the Azaleos report, organized by Osterman Research:

“When comparing both approaches for implementing enterprise configurations of the Microsoft Unified Communications stack of applications – Exchange, SharePoint and Lync – the research found that private cloud services were on average 20% cheaper than Office 365 (even after factoring in the recent March 2012 price reductions), and 1% cheaper than on-premise deployments. For basic configurations, however, public cloud services were 21% cheaper than private cloud services and 36% cheaper than their on-premise cousins.”

In a prepared statement, Osterman President Michael Osterman said:

“In a nutshell, we found that the private cloud model of delivering and managing enterprise grade services using the Microsoft stack is less expensive than the public cloud because of two primary factors.”

Whom Do You Trust?

Of course, both Azaleos and Microsoft have vested interests in their respective research outcomes.

• Microsoft wants to show how the cloud enhances productivity, driving customers to Office 365.
• Azaleos wants to show how true managed services — involving Microsoft applications deployed in private clouds — can deliver real value and potentially some cost savings.

Where do I stand? Whether you lean toward Microsoft or Azaleos, there is a common thread: The classic client-server model is just too darn difficult and expensive to manage.

I do believe cloud apps — whether they are Microsoft Office 365, Google Apps, etc. — boost productivity and ease IT management. And I believe the same can be said for the private clouds.

Ultimately, it’s up to channel partners to weigh the public cloud vs. private cloud scenarios for customers. Either path forward has got to offer advantages over legacy approaches…