Microsoft Office 365: What It Means To Small Businesses And Entreprises [ANALYSIS]

Editor’s Note: Microsoft has officially removed the beta tag on its Office 365 product and is ready to rumble within the cloud space.  In this post, Saheed Adepoju, Co-founder & CEO of Encipher Group, examines Microsoft’s path to this point and how this may change the way we use the web as we know it.

Microsoft’s journey to the cloud started roughly two years ago when they realized that the likes of Amazon and Google had a viable business model for the cloud and have pretty much mastered the art of doing business in the cloud. Then, they introduced Microsoft Azure (on which I believe Office 365 runs), which became their answer to the likes of Amazon web services and Google Apps.

Over time, Microsoft introduced BPOS (Business Productivity Online Standard Suites) which allowed users to pay a monthly fee for Exchange online, SharePoint Online, Office Communication online, Microsoft forefront and Microsoft Office Live meeting. Now, they’ve replaced Microsoft BPOS with Office 365, a product which aims to provide the same Microsoft office experience in the cloud primarily consumed via the use of a web browser.

Beta tag off, boxing gloves on


With Office365 now out of beta and out to tackle the competition, will it succeed? Well, if there is anything Microsoft has proved over 25 years of their existence, it is that they can do Office productivity tools very well. Microsoft office accounts for 50% of their revenue within Microsoft and everybody on the planet uses their application for word processing.

In the Cloud however, Google started this business model to allow users save word documents within their servers. Google has had quite a lot of experience in managing such an infrastructure however with Microsoft, they are yet to learn about business in the cloud and it will come with surprises. That said, if Microsoft is able to achieve stability with their infrastructure, Office365 will pull away most customers from Google’s offering because they are the king of Office utilities.

Flexible payment option


One of the attractions to this business model is the flexibility in payment plans. Office 365 has a lot of entry points to their new product but I believe this might be a barrier for small businesses that would like to partake in this.

In my opinion, Microsoft has too many price points and can be a barrier for adoption. With zero Service Level Agreement (SLA) and Customer service support for a Small Business (Plan P1), it is a dead on arrival strategy for Microsoft with respect to small businesses and here is why:

Google has had plenty of outages in the past regards their cloud infrastructure. I believe from that experience, a 24×7 online and phone support is seen as a must-have to allay the fears of a small business owner that his files and documents are safe when there is a blackout.

Microsoft recently had an outage with respect to its online Exchange offering back in February 2011 and those enterprises were furious with Microsoft’s response. Not putting up a 99.9% SLA and no 24×7 telephone responses for all plan tiers is a recipe for disaster but who knows, they may deliver.

Office 365 vs Google Apps


One thing end users seem to forget it that, Microsoft only launched a service by which you could use tools they already have offline, online. With Google Apps for Business (via Google Apps Marketplace), a small business has more access to much more 3rd party applications developed by other companies. e.g. CRM, Project management.

Small businesses can get all they want to achieve their business objectives using different apps from the market place. Microsoft is yet to have such a model to allow extension of their Office365 suite which is simply Office utilities via the browser.

Final Thoughts


I believe that Office 365 is a contender but only on one hand: Office utility tools because they invented it. On another hand, cloud computing isn’t their turf, since they are still learning, though learning fast.

That said, I predict that enterprises would adopt the Office 365 more than small business owners due to the existing relationship Microsoft has with these SMEs. Small Medium enterprises are more likely to stick with Google Apps because of its low barrier to adopting it and also a large amount of other applications to take advantage of.

The question now is: What happens when an enterprise with existing relationships with Microsoft decides to run their business like an SME because they can enjoy more benefits? Will they still take the 365 way to the cloud?

Saheed Adepoju is the Co-founder & CEO of Encipher Group, a software development company based in UK and Nigeria with expertise in ensuring that products and services are always available on the “cloud”, regardless of platform or device.

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