Microsoft launches Office 365

Microsoft formally launches its Office 365 product with an emphasis on its Latin American and Caribbean small and medium sized business customers.
Microsoft goes all in on the cloud
Published in the Business Guardian, July 07, 2011
Steve Ballmer, CEO of Microsoft, launches Office 365, the company’s enterprise level productivity suite for online users at New York City’s Skylight in SoHo. Photography by Mark Lyndersay.

NEW YORK: Steve Ballmer is looking determined as he takes the stage, his beefy frame squared to take on all comers. He’s engaged but wary of his audience here at the Skylight, a room full of technology writers who have heard many a sales pitch in their time.
“What happens when Microsoft Office meets the cloud?” Ballmer asks.
“Collaboration is what happens.”

His presentation is rich with numbers. More than a billion people use Microsoft Office as a tool for productivity. The Office 365 beta test attracted 200 million companies globally, 60 per cent of them from small and medium sized businesses (SMBs) and Microsoft is pushing the launch of its new online version of its productivity suite in 40 nations around the globe.
It’s the largest beta programme for business that Microsoft has ever hosted and their largest test of an online service.

The brisk presentation is also rich with references to small companies who have had great success switching their systems to Office 365, and Ballmer talks about them as if they are chums he’s constantly encountering for fraternal drinks.

But Steve Ballmer isn’t really there to sell Office 365 or even to announce it. He’s there to send a message, and it comes through clearly, Microsoft is stacking its chips and pushing them all on the virtual table in a company wide bet on online delivery of its tools, the software as a service (SaaS) model that’s worked so well for Google, Flickr and Facebook.

Unlike those companies though, Microsoft has an established and quite successful business model that’s based on software in boxes and semi-permanent licenses that users buy along with the shiny discs.
The product has been around for a quarter of a century. It’s sold in 46 countries and 2,300 Microsoft employees work on the product. Office anchors sales through a partner network of 66,000 businesses who collectively employ 1.1 million people.

It’s a business that’s been good for the Redmond software company, and it’s one that it seems disturbingly keen to set aside in favour of bits served in a browser for a monthly fee that’s surprisingly low.
There was the very clear sense from all the company’s executives, from Ballmer to regional representatives for Latin America and the Caribbean, that the company was moving inexorably to the cloud as a way of delivering their software.

It’s a business model that the company began exploring six years ago when Energiser came to Microsoft and asked them to take over their backoffice operations.
The company formulated a service suite that they eventually offered to other companies interested in the same product.

Then it was sold under the unwieldy name BPOS, for Business Productivity Online Suite, a name that’s mercifully been retired in favour of Office 365, which references the 24/7/365 availability of the service.

The online suite consists of the usual Office suspects, Word, Excel, PowerPoint, Outlook and OneNote. New to the suite is the Lync service, which replaces the Communicator module with a more robust technology capable of some quite surprising tricks. Using Lync, it’s possible to host virtual meetings with both synchronised and individual control of slides and to use a virtual whiteboard inspired by the company’s Visio product.

All the software is immediately identifiable, if simplified and streamlined for web browsers, and anyone familiar with Microsoft’s existing boxed product will be able to go to work using the software almost immediately.
The company boasts that anyone can begin using Office 365 in five minutes from signup on the website to opening a document.

Familiarity and ease of use are critical leveraging points that Microsoft is counting on in its thrust into enterprise and the SMB sector.
“We've worked with customers with 20,000 seat installations and we've been able to win those customers because the customers themselves are champions of the Microsoft experience,” explained JuanCarlos Puente, Cloud Productivity Regional Manager for Microsoft Latin America.

“They don't want to work with OpenOffice, they don't want to use Google in the enterprise, they want to continue using the tools they know and have been using for many years.”
“Microsoft has strategies for companies who are nervous about moving their operations onto the cloud. We do not go to the client with an ultimatum, it's's the cloud or nothing.”

Microsoft has a particular interest in promoting the Office 365 product in Latin America and the Caribbean. The sector has traditionally represented three percent of sales and income for the company, but the uptake of the online productivity suite has been so strong that Microsoft has committed to more region specific marketing.

Latam, as the sector is described, may have accounted for just four percent of overall beta test users, but it is the third largest region adopting Office 365 and there are 300 partners actively selling the online service. Of the six countries and 8,500 companies that took part in the test of the online software in Latam, 174 were from Trinidad and Tobago.

Of those companies, only Gulf Insurance and Caribbean Airlines were ready to announce their adoption of the product in time for the launch.
“I’ve been fielding calls from partners eager to sell the product throughout the Caribbean,” JuanCarlos Puente says, “In Peru alone, 17,000 people logged into a webcast on Office365. This is a product that's as easy to use as buying a book on Amazon, and we're going to be pushing this.”

Some of the appeal of the product is understandable. The cost of adoption is relatively low (see plans and pricing). Beyond the cost is the flexibility and the guarantee. One company using Office 365 temporarily increases its workforce by 500 seats during the year and found the pay-as-you-go model very attractive. Once there’s an Internet connection, and Microsoft has certain expectations for that connectivity, the company guarantees 99.9 percent availability of the online suite in its service level agreements or it will refund the customer’s payment.

The company’s Latam executives were unaware of the Guardian story about a Cabinet note detailing a $194 million purchase of Microsoft software and services but did acknowledge that they were revisiting strategy with all its public sector customers in Latam to offer the Office 365 service.
“We are aggressively going to public sector clients and offering them the option of using Office 365 and the cloud,” said Jose Gomez Cueto, Microsoft’s Senior Product Manager.

“We believe that one of the largest opportunities in Latam is in the cloud. This is the beginning of a trend in which we can bring enterprise technologies to smaller customers. It’s making office simpler and making it available at a lower cost and allowing customers to plan their purchases in a more dynamic way.”
“Latam is a fast mover on the adoption of online services and companies that couldn't afford our enterprise class technologies are now able to make use of them in Office 365.”

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