TMCnews Featured Article
October 01, 2012
Corporate Challenges Plague Office 365
By Susan J. Campbell, TMCnet Contributing Editor
Google (News 
- Alert) might have started as a search engine, but the company’s quest to diversify its portfolio, so to speak, has spawned significant movement among the competition. Apple (News - Alert) recently took Google Maps off the iPhone, which many believe to be a reaction to Google’s jump into the smartphone market. And Google Apps has affected how Microsoft’s (News - Alert) Office 365 product is approached.
Microsoft has made a move to the cloud, just like many other key players hoping for dominance. But the move was made to take on Google Apps, which was already in the cloud, according to this CIO blog post.
The problem is Office 365 was that while it has able to keep up with Google Apps in the state and city government agencies; the platform has had trouble getting past the education and small business sectors. The first foray of Office 365 into the cloud came with a fairly hefty price tag (News - Alert) - $120 per user per year. But less than a year after implementing the new offering in the cloud, Microsoft cut the price on Office 365 by one-third.
Microsoft didn’t actually name their Office product 365 until about a year ago, but that was mostly just a rebranding effort with some overhauls included. The newer product offered users more enterprise-level features like Exchange, Lync, Microsoft Dynamics CRM and SharePoint. Office 365 also came with a desktop version of Office Professional Plus.
Office 365 kept its small business customers and state and city government agencies as well, but so far has not been able to leap into the enterprise-level despite its new offerings. While there are cost savings with going to the cloud, it’s probable that most of the large enterprises do not foresee those cost savings making up for the cost and time it would take to migrate completely to the cloud.
Some believe it would take around two years for the larger enterprises to gain back the investment. What might have a larger impact on a company’s decision to stay put is that the administrators who would make the decision to go to the cloud would effectively be giving their jobs away. If using SharePoint, Exchange and Lync is something that will make their jobs obsolete, why go to the cloud?
Enterprises have an ingrained fear of migration and collaboration of their apps in the cloud. It’s possible that Microsoft’s next version of Office 365 could be designed to address the fears of the enterprise while preserving the relationship with existing customers, but some in the industry would suggest that cloud adoption is now past this point in terms of education and understanding.
The next version is slated to drop in 2013 – reassessing at that time may provide a clearer picture into cloud adoption comfort at the corporate level.
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Edited by Jamie Epstein
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