Office 365 Outage Shouldn't Affect Cloud Uptake

Office 365's short outage likely won't imperil the cloud's growing presence in our IT lives. But big incidents could lead people to jump between cloud offerings.

Office 365 and Microsoft CRM users experienced a few hours' worth of outages Aug. 17, something a Microsoft spokesperson attributed to a "networking issue" at "one of our North American data centers."

Service ended up fully restored. While customers wrestled with a lack of email and CRM, they rumbled their displeasure on Twitter and the Web at large. "Office in the Cloud just Evaporated," read one post on an Office 365 forum. "Need some new weather patterns."

Office 365 links Microsoft Office, SharePoint Online, Exchange Online and Lync Online into a platform that costs between $2 and $27 per user per month. On top of that, Microsoft is offering an Office 365 Marketplace with productivity applications and professional services.

It hasn't been that long since Microsoft launched the final version of Office 365, its cloud-based productivity software, with a June event in New York City hosted by CEO Steve Ballmer. And the new offering was supposed to be much more stable, in terms of downtime, than its BPOS (Business Productivity Online Suite) predecessor. Will an Office 365 outage, coming so soon after its release, dissuade potential users from jumping on Microsoft's cloud bandwagon?

Those types of outages certainly haven't dissuaded the majority of users from cloud services such as Amazon's EC2 or Google's various productivity platforms. In April, a well-publicized outage at Amazon Web Services led to service disruptions across the Internet, affecting popular Websites such as Reddit, Quora and Hootsuite. Google lost some of its users' email data in February, and launched an aggressive effort at restoration. Indeed, it's popularly assumed that every cloud service will experience some sort of downtime, to the point where the possibility is explicitly integrated into service contracts.

Moreover, tech companies' software offerings have drifted toward the cloud at an ever-more-rapid pace. By the time Microsoft launched its "all-in" cloud strategy, the trend was well underway, placing the company under pressure to diversify its primary revenue stream beyond desktop software. Certainly, it makes financial sense for Microsoft, given how a cloud-based subscription model ultimately yields more revenue than a single copy of software, provided the customers in question keep paying for a sustained period of time.

If a cloud service goes down, it's probably no longer a question (or soon won't be a question) of whether a client will choose to jump back to desktop-based software. Once the industry succeeds in driving enough companies and individuals into the cloud, the question will be whether an incident compels customers to jump from one cloud service to another-and while customers generally seem willing to live with even a couple hours' downtime as a fact of life, it still remains to be seen what a truly catastrophic incident will do for a particular company's retention numbers.

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