Microsoft has confirmed it is holding an invitation only Office 365 launch party in New York on June 28th, and CEO Steve Ballmer will be in attendance to head up the marching band. It might sound like a lot of pomp and circumstance for the release of yet another new productivity suite, but trust us when we say this marks a pretty significant milestone for how Microsoft does business.
Microsoft offers a ton of cloud services, but most of these have a very experimental feel to them, and more often than not they are typically free. Microsoft has been very careful up to this point to not cannibalize their core products such as Windows and Office, even in the face of competition from Google Apps who have been aggressively targeting their customers. Office 365 is really just the evolution of their BPOS services suite, but this time it is being aggressively marketed as an alternative to a traditional Office implementation, rather than simply a complementary service.
In the consumer space rolling out updated software is simple. Enthusiasts will always want the latest and greatest, and the rest of us will simply buy whatever looks reasonable when upgrading to a new PC. In the world of big business however, upgrading software becomes a much more complicated proposition. Many IT departments to this very day are still rolling out Windows XP with Office 2003 pre-installed simply because that’s what everyone else at the company uses. The last thing IT departments want to worry about is support calls on what a .docx file is, or why someone can’t find an option on the ribbon that was in Office 2007, but not 2010. Not to mention the challenges involved in upgrading Office versions on thousands of remote machines should they choose to standardize on the latest and greatest every 3 years.
Office 365 promises to solve these problems for business of all sizes, and what we’ve seen so far looks promising. It will offer a per seat license that is custom tailored for the individual needs of each employee. A license for the receptionist for example might only unlock email and Office web apps, while the CEO’s copy might include all of this plus web conferencing, instant messaging, and even a full copy of Office 2010 Professional Plus. Microsoft takes care of the server hosting, and keeps all local and remote users fully updated with the latest and greatest features as time goes on.
Microsoft is beginning the slow transformation from a software company to a services company, and if successful here, expect to see this business model make its way into Windows.