Microsoft takes to the cloud

Microsoft's Steve BallmerMicrosoft has finally rolled out its Office 365 product, taking the entire Office suite into the cloud and offering elements of unified communications technology including its Lync UC suite, Sharepoint and Exchange. (Pictured is MS VP Steve Ballmer at the American launch).
Reaction has been positive so far and this is a sign that Microsoft is finally taking a decent poke at Google, which has dominated in the online office application market so far.


Pricing will be key to the system's success. Small organisations will pay £4 a month for what will effectively be a cut-down version (they won't need Microsoft Lync, the unified communication segment, for example).

Enterprise-sized companies will pay up to £17.75 per user per month and will have unlimited storage (OK, technically this is impossible but it'll be big) and further communications functionality.

The applications, which is the bit that will capture everyone's interest whatever the size of their business, will now look the same online as they do/did on the desktop. This has excited comment from Google, which suggests that the way to put applications online isn't necessarily to take an old product and put it into the cloud.

Clever bit

This is to miss the truly clever thing Microsoft is doing, if it pulls it off.

A major issue facing software companies which sell shrink-wrapped (rather than tailored) software is how to continue making money out of it when it's so sophisticated that nobody really needs to upgrade any more. The days when you truly needed to move from one version of Microsoft Office to the next are probably numbered.

So a clever thing to do is to move to a subscription model, so all of your customers give you money every month. That way your revenue is assured.

The major issue in the smaller business market will be that Google offers something very similar for nothing. The market may not go for this - Microsoft will be hoping otherwise.
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