Microsoft launches Office 365, glosses over cloud limitations

Office 365 is available at a variety of price points, starting at $2 per user per month for just basic email, moving up to $6 for a small business package and up to $27 per user per month for an enterprise option that includes all the online offerings plus the non-cloud Office Professional Plus. Microsoft also said 20 service providers worldwide are bringing Office 365 services to customers this year, through a program that lets Microsoft partners sell Microsoft products with extra bells and whistles of their own design.

 

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Ballmer on Tuesday primarily talked about the benefits to small businesses. Analyst Paul Burns of Neovise, who has been testing the Office 365 small business plan in beta, has previously said he doesn’t believe the service is ready to ditch the beta tag and enter general availability.

In updated comments this week, Burns said he hasn’t hit any outages or disruptions in the past few weeks, but “other limitations still appear to be in place. For instance, if I want to add ‘external contacts’ to be shared among Office 365 users, I still have to do it manually. This involves typing in first name, last name, display name, alias and email address for every contact I want to add.  That is a huge time sink since I have a few hundred I’d like to add.”

Using your own domain name for Office 365 email can also be a pain due to instructions that “are confusing and cannot be followed in sequence,” Burns says.

Microsoft didn’t address any of the limitations in Office 365 during public remarks, but both Burns and Cain give the service a fighting chance.

“Office 365 definitely puts Microsoft in the game versus Google Apps and [IBM’s] Lotus Live,” Burns said.

Cain, meanwhile, notes that “Just about everybody is a Microsoft Office customer, and many are Exchange shops.” It’s possible non-Microsoft customers will gravitate to 365, but Cain says the service “is appealing first and foremost to [current] Microsoft customers.”

Forrester analyst Christopher Voce, meanwhile, wrote a blog post saying Office 365 is “one of Microsoft’s most important products in the company’s history,” and that its success will be “driven by the strength of Microsoft’s broader platforms as well as the large partner ecosystem.”

Google Apps is priced at $50 per user per year, and has more than 3 million businesses signed up. But Microsoft claims there are 750 million active users of Office, and 100,000 or so customers have tried out the 365 beta.

Ballmer and colleagues showed some real-world examples of customers using Office 365 to become more efficient. A company called Wise Group is apparently getting rid of 60 servers and saving 30% on travel costs with the help of Microsoft’s cloud service.

Microsoft also showed demos of how the company’s cloud services help business teams collaborate, and how Microsoft software products such as Outlook and Word integrate with the browser-based services. One feature that may be compelling to small businesses is the ability to create and edit websites in the same way one edits Word documents.