Office 365 Is Integral to Microsoft's Future: 10 Reasons Why

By Don Reisinger  |  Posted 2011-06-28

Office 365 Is Integral to Microsoft's Future: 10 Reasons Why

On June 28, Microsoft CEO Steve Ballmer officially announced the availability of Office 365 after a long beta period. Now both small businesses and larger enterprises will be able to access the service after paying a per-user per-month fee. Those prices range from $6 per user per month to $27 per user per month, depending on the needs of the respective organization.

As expected, Microsoft made a big deal over the launch of Office 365. The company rightfully sees the platform as a key component in its future plans, and it's doing everything it can to build up the excitement and interest around the platform.

That excitement and interest cannot be underestimated. Office 365 is integral to Microsoft's future. If the platform fails, it could set off a chain reaction that could have profoundly damaging effects on the software giant in the coming years. If it's a success, it could prove to be one of the most important launches Microsoft has offered up in years.

Simply put, Office 365 is everything to Microsoft right now, and there's good reason for that.

Read on to find out why Office 365 is integral to Microsoft's future.

1. It must prove Microsoft "gets" the cloud

During the June 28 event launching Office 365, Microsoft's CEO said that the platform "is where Office meets the cloud." While some might call that comment a throwaway, it says something about Microsoft and where the company is headed. Office 365 is designed to prove that the software giant understands the cloud and wants to be a key player there. If the platform is successful, it will achieve that goal. But if it fails, Microsoft could be in for trouble. Office 365 must make the enterprise believe beyond a shadow of a doubt that Microsoft "gets" the cloud.

2. It's Microsoft's best answer to Google Apps for Business

Currently, companies that want to take advantage of cloud services can invest in Google Apps for Business. That platform gives access to Gmail, Google's Calendar platform and Google Docs. It costs $50 per user per year. By launching Office 365, Microsoft has made it clear that it believes its new platform is its best answer to Google Apps for Business. Now, the company must hope the enterprise agrees.

3. It keeps the enterprise engaged

Speaking of the enterprise, it's important to note how integral that market segment is to Microsoft. Over the years, it has been the corporate world that has buoyed Microsoft's profits and ensured that the company stays a dominant force in the software space. With Office 365, Microsoft is hoping to keep those enterprise users engaged and buying its office productivity applications, whether it's in the cloud or on premises. If that's not integral to Microsoft's future, what is?

4. It doesn't focus on one enterprise segment

Microsoft's current flagship desktop software products, including Office and Windows, appeal to companies of all sizes. And that has proved to be integral to the company's success over the years. With Office 365, Microsoft is saying that the new platform will similarly appeal to companies both big and small. That's important. By not focusing on any single enterprise segment, Microsoft will have a much better chance of getting Office 365 off the ground. At this point, getting it off the ground means everything.

Searching for a Cloud Cash Cow


5. Collaboration is king

Microsoft has done a fine job of offering collaboration through its SharePoint service. The enterprise has responded well to that. It's no surprise, then, that Microsoft has made collaboration king in Office 365. The platform supports SharePoint, and collaboration features are built in across the service. The corporate world expects collaboration features in productivity suites, and Microsoft is delivering them. That's a good thing for the company's future.

6. Can it be Microsoft's future cash cow?

Office and Windows continue to be the cash cows for Microsoft. However, many of its other businesses are not performing all that well. Considering the future of productivity will be in the cloud and Office 365 relies heavily upon the Web, the service itself could eventually be a major cash cow for Microsoft. Then again, it might not. Right now, Microsoft needs to focus on making Office 365 a revenue winner as enterprise users transition to other platforms to fulfill their corporate needs.

7. It will decide Microsoft's future strategy

Though Microsoft is aware that the future of the marketplace is in the cloud, the company is taking a bit of a risk investing so heavily in a new cloud productivity suite for enterprise users. If Office 365 turns out to be a flop, executives might be gun shy about investing even more into the cloud. However, if the platform succeeds, it could be the inspiration for Microsoft's entire productivity strategy. Simply put, Office 365 could determine what Microsoft's future go-to-market strategy will be.

8. Call it price testing

As noted above, Google Apps for Business costs users $50 per user per year, making it substantially cheaper than Office 365, which starts at $6 per user per month and goes up to $27 per user per month. By pricing this suite so high, compared with the competition, Microsoft is setting itself up as a premium provider of what it calls a premium product. Exactly how the enterprise will respond, however, remains to be seen. Office 365 could play a role in Microsoft pricing in the coming years.

9. It sets the framework for future consumer initiatives

Although Office 365 is decidedly enterprise-focused, it could be the framework for robust cloud-based productivity solutions Microsoft might have planned for consumers. Granted, the company already has Office Web Apps for consumers, but it's not widely used. And there is good reason to believe Microsoft could be planning more consumer initiatives in the coming years. The success of Office 365 and how employees respond to its functionality might impact future Microsoft decision-making in the consumer space.

10. It opens another front against Google

As noted, Office 365 is Microsoft's best answer yet to Google Apps for Business. More importantly, the productivity suite opens up another front against the search giant. Across several markets, including mobile, search and even operating systems, Microsoft and Google are battling it out. With Office 365 now available, the companies are vying for the enterprise. And as Microsoft's history has shown, the enterprise is one market that both companies definitely want to control.

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