The day after Microsoft’s cloud visionary Ray Ozzie announced he is stepping down, Redmond announced today the re-launch of its cloud office suite as Office 365. Office 365 will combine all of Microsoft’s existing SaaS offerings (Microsoft Office, SharePoint Online, Exchange Online and Lync Online) under one umbrella. Plans start at $2 per user per month for e-mail hosting, but scale up to $24 per user for the whole package of services. That’s a cost of $864 per user over the course of three years. Can Microsoft justify the steep cost?
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So far, it appears Office 365 will offer the following advantages over using self-hosted and desktop versions of the software:
No hardware, no deployment: IT won’t have to provide servers for SharePoint and Exchange, and won’t have to spend time configuring and deploying the software.
No more patching: IT won’t have to worry about keeping Office up-to-date anymore. All security and bug-fixes will be deployed on Microsoft’s end, cutting out a major headache and security for IT managers.
Mobile access: Any mobile device that supports ActiveSync (that would be all Windows Mobile/Windows Phone devices, iOS devices and any device running Android 2.1 or better) will be able to access mobile docs. No word yet as to whether mobile editing will be supported.
It seems like a tough sell, even for the Microsoft brand, when Google Apps costs $50 per year per user and QuickOffice sells for no more than $20 per user.
We’ve previously given Google some advice on how to up its game against Office 2010. Pricing was on the list, unless I’m missing something about Microsoft’s pricing, it should be front-and-center in Google’s marketing efforts.
However, Microsoft is offering significantly more than Google Apps. I could only find volume licencing pricing for Exchange 2010 online. It does seem that self-hosting Microsoft’s applications would be cheaper, not counting work and infrastructure. But the potential savings in hardware and deployment could make it worth it for enterprises that want the extensive features of Microsoft’s offerings.
The security of cloud-hosted services remains an ongoing concern, but those concerns are being increasingly addressed.
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