Microsoft Office 365, Hosted Productivity Platforms Offer Benefits for SMBs

Office 365 can serve as an anchor to cross-sell complementary hosted solutions, according to an AMI report.

Starting with its June 28th release, Microsoft's hosted productivity and collaboration suite, Office 365, is poised to make a big splash with U.S. small to medium-size businesses, which IT analytics firm AMI-Partners considers businesses with under 1,000 employees. Priced at only $6 per user per month, SMBs get all of the Office Suite applications (Word, Excel, PowerPoint, Outlook), plus document storage/collaboration and video/Web conferencing (Lync). An AMI report suggested such a hosted productivity suite offers much more sales opportunity than its stand-alone value might suggest.

Office 365 can serve as an anchor to cross-sell complementary hosted solutions, as shown in AMI's U.S. SMB Cloud Playbook - Strategic and Tactical GTM Planning Guide. Forty-two percent of U.S. SMBs indicated they would be interested in purchasing a hosted productivity/collaboration suite for a low fixed monthly cost in the next twelve months. These SMBs are two times more likely than other SMBs to be interested in also purchasing hosted CRM and Accounting solutions, as well as other services such as email security, storage, wireless broadband, and PC security, the survey found.

With the release of Office 365, SMBs will begin to evaluate their current provider and determine whether their solutions offerings meet their needs as they begin moving more of their IT into the cloud, the report predicted. AMI researchers said cloud service providers should ensure that their customers have the option for a hosted solution such as Office 365 and other hosted solutions and services, or risk customer attrition and/or forfeited revenue. Office 365 can also aid in customer retention, said Jessica Efta, manager of SMB client services at AMI-Partners.

"SMBs are three times more likely to switch their communications service provider in the next 12 months in order to procure hosted productivity suites than those who switch for routine reasons," she said. "Purchasing integrated solutions from a single provider is important to SMBs who wish to keep their IT management simple."

AMI's 2011 U.S. SMB Cloud Playbook - Strategic and Tactical GTM Planning Guide provides a tactical framework for architecting cloud-based services offerings to meet the growing demand for cloud services "bundles" and a perspective on cloud-related dynamics shaping up in the SMB space, including cloud-related needs among four types of SMB segments; behavioral and usage characteristics; future adoption plans, cloud and ICT spending, market opportunity, price sensitivity, service bundling preferences and demand uplift; vendor value propositions and offers/bundles and purchase channel mix and capabilities.