Microsoft ups ante in Google cloud fight with Office 365 for Business

Office 365 for Business has now gone on general release. Should Google be worried?

The all-new Office 365 for Business has gone on general release, and been hailed as proof the software giant is getting serious about arresting the flow of SMB and mid-market firms to Google’s rival cloud apps platform.

The latest incarnation of Office 365 features the 2013 versions of Exchange Online, Lync Online, Sharepoint Online, as well as tighter integration with the subscription version of Microsoft’s all-conquering desktop software Office 2013.

Further to this, cloud-based versions of Microsoft’s business task management software Project and its diagram creation tool Visio are also understood to have been added to the role-call of offerings available as part of Office 365. Meanwhile users of the enterprise edition will also benefit from having access to Microsoft's social enterprise offering Yammer.

The software giant also plans to expand the enterprise social capabilities of its online productivity suite, by rolling out voice, presence and instant messaging features that draw on the company’s Lync and Skype products by June of this year.

This has the potential to open up Office 365 to a very different set of customers.

These products are available in a range of new product bundles, targeted at enterprise, mid-sized and SMB users. There is also a new Office 365 ProPlus edition that lets people supplement their Microsoft deployments with cloud-based versions of Word, Excel, Powerpoint, OneNote, Outlook, Publisher, InfoPath and Access on up to five devices.

During a webcast, setting out features of Office 365 for Business, Kurt DelBene, president of the Office division at Microsoft, said the product was the most ambitious release of Office to date.

“With Office 365, everyone from large enterprises to small businesses to individual consumers can now benefit from the power of Office and the connectivity of the cloud,” he said in a statement.

“This release unlocks new scenarios and delivers capabilities that far surpass anything available in browser-only solutions.”

Mark Herbert, business development director at Office 365 Syndication partner Inty, said the new product bundles should make it easier for end users to switch from on-premise to cloud.

“Microsoft has increased the features of Office 365 to bring it closer to the full enterprise product that you buy and run on your own servers, and closing the gap a little more between what you would do in an enterprise in-house and what you would do in the public cloud,” Herbert told IT Pro.

“They’re upgrading all of the back-end severs running those [core Office 365] products to the latest versions and that’s a tremendous benefit for anyone who would have previously done that in-house...and is way ahead of when most enterprises probably would have been planning to do it.”

Microsoft’s decision to forge closer ties between the desktop version of Office and its cloud productivity suite is also a smart move, added Herbert.

“We’re already seeing the lines between the two offerings beginning to blur, with the release of the subscription version of the Office [2013] desktop product,” he said.

Gunning for Google
Now that both products are available on a similar subscription basis, this should make it easier for Microsoft to up-sell other parts of its cloud portfolio to end users.

“In the past you would have had to have taken [Office 2013 and Office 365] on two different licensing models...but now, adding bits from the rest of the product set has got easier,” Herbert claimed.

This could stop long-standing Microsoft customers ditching its products in favour of Google Apps for Business, he claimed.

“There is a core market that is moving to Google Apps...mainly micro businesses that have gone for it because it’s nearly free,” he added.

However, given that Google recently called time on the free version of its Google Apps for Business product for SMB users, Dimitri Inglezos, a director of cloud services provider, The Internet Gurus, said the new Office 365 should stem some of that flow.

“In the past, one of the great attractions was that it was free, but now you have to pay for every user,” he said.

“I used Google Apps when I first started out, but if I had to pay for it and choose between that and Office, I would have chosen Office because it’s got more features and is easier to scale.”

At the time of writing, IT Pro was awaiting confirmation about the pricing of the various Office 365 bundles, but Inty’s Herbert said Microsoft has tweaked some of the product SKUs, which should result in some users gaining more functionality.

“If you’re on an E1 SKU, you would have to upgrade to E2 [to get certain features], but they’re doing away with E2 now, so you’ll get those features for nothing on E1, which will make the lower offering richer for the same price. Effectively, that will work out as a cost reduction,” said Herbert.

“There are also some new offers for the mid-market, in the zero to 250 seats range, which are going to be really good and compelling for SMBs and mid-sized businesses.”

Details were sketchy at the time of writing about how these price changes may affect enterprise users, but Herbert said that might be because Microsoft’s not worried about losing them to Google.

“I think Microsoft feels comfortable with its hold on the enterprise for now, because not many of them are thinking about ‘going Google’ because its products are not fit for that,” he claimed.

“It is SMBs they need to focus on, which is why they’re rolling out a new offering [for smaller businesses] that will offer a really compelling price per user and give them everything – Office 365 and Office 2013 – in one bundle,” he concluded.

Visio and Project arrive in Office 365
The inclusion of Visio and Project in Office 365 has been rumoured since last October, and could bolster Office 365’s appeal to a new tranche of users, said Richard Gibbons, software manager at Microsoft reseller, Bechtle Direct.

This is because of the high cost of procuring on-premise Project, he explained. “Licensing Project Server on-premise is complicated and expensive, because you have to provide Sharepoint Enterprise first and then put Project Server on top of that, so it is a big investment.

“This has the potential to open up Office 365 to a different set of customers...who may have been put off buying on-premise Project because of this cost.”

The product is one many companies end up over-licensed on because it tends to be used on a case-by-case basis. So, when work on a particular project involving the software is over, many end users no longer have a need for it.

“When we carry out software asset management assessments, you tend to find that people end up with many more versions of that product than they need...and using the cloud version should help put a stop to that and save them some money [in licensing costs],” Gibbons told IT Pro.

“It will make it easier for people to spin up a Project server environment and – even if you only use it for a year – you’re not left with £70,000 of software you’re never going to use again.”