Microsoft Propels Its Cloud Play "Take Two" with Office 365 Public Beta

| Apr 19, 2011 | Collaboration Platforms
| Analyst: Brad Shimmin

Event Summary

April 17, 2011 – Microsoft announced the public beta of Microsoft Office 365, the company’s next-generation cloud productivity service for businesses of all sizes. Office 365 was recently introduced in limited beta, bringing together Microsoft Office, SharePoint Online, Exchange Online, and Lync Online in an always-up-to-date cloud service. The public beta allows millions of people in more countries and more languages – a total of 38 markets and 17 languages in all – to try Office 365 for the first time.

Quick Take

Analytical Summary

• Current Perspective: Positive on Microsoft's public beta release of Office 365, because by taking the shackles off its forthcoming software-as-a-service (SaaS) collaboration suite, Microsoft will build further momentum for its final product. By opening up Office 365 to additional languages and new markets, Microsoft will expand an already sizable pool of potential customers. However, the encompassing scope of this venture, coupled with an as-yet-unspecified release date and a complicated purchase plan, leaves Microsoft at least temporarily in a vulnerable position opposite rivals with cheaper solutions that are not in flux.

• Vendor Importance: Very high to Microsoft, because the vendor is quite literally gambling with its future, specifically the current dominance enjoyed by three products (Microsoft SharePoint, Exchange, and Office). Together, these products enjoy a commanding position across key enterprise requirements such as messaging and productivity. By transitioning these premises-centric products into a unified, cloud-capable but premises-friendly combination of software and services, Microsoft is creating a feasible way to continue its desktop dominance within an increasingly cloud-centric marketplace. However, this move also serves to validate the cloud-centric philosophies espoused by many of its rivals, most notably Google, making Office 365 a must-win proposition for Microsoft.

• Market Impact: Very high on the collaboration platform market in general, since Microsoft's move to expand the Office 365 beta program will put further pressure on the current vendor landscape, bringing Microsoft one step closer to a symmetrical and unified collection of hybrid (cloud and premises) software under a single licensing and support program – a feat still well out of reach for many rivals. Furthermore, though no new major features have found their way into this release, with the introduction of the Office 365 Marketplace and the looming integration between Office 365 and Microsoft's platform-as-a-service (PaaS) offering, Azure, the company is applying further pressure as it threatens to empower its sizable partner ecosystem fully in the service of Office 365.

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