The Small & Medium Business Case for Office 365

The Small & Medium Business Case for Office 365 - An Evaluation of Microsoft's Cloud E-mail and Collaboration Services
For some background on Office 365 see my previous post http://blog.redwoodnetworks.com/2011/04/what-makes-sense-in-cloud-today.html.  I'll assume that everyone is passing familiar with hosted e-mail and collaboration services for the purposes of this article though.

Like Punxsutawney Phil, the economy saw its shadow in 2010 and returned to its hole for another 6 weeks (months) of winter.  Spring is here now, though.  Businesses are spending money and hiring again and they've learned a few things.  First of all, they're a little more cautious... especially with regards to technology and purchasing systems that require a great deal of ongoing maintenance.  They continue to be interested in new ways of doing more with less.  What's new, though, is that they are willing to take some calculated risks, give some new ideas a try.

I'm going to make some generalizations about businesses... see if any of this sounds like your business:

1. You have limited capital assets to invest on computer technology, software and services.
2. You need to keep up with technology trends within reason... to keep in line with vendors, partners, clients, etc.
3. You require solutions that are reliable, business tested, and easy to manage.
4. You have one or more in house computer servers now providing e-mail and collaboration services.
5. Your organization includes several people that require the ability to not only send e-mail but to collaborate with each other and external users efficiently.
6. You've delayed renewing your systems for the last couple years due to the recession but you just can't wait any more. Your systems are aging and it's just time to upgrade.

Does any of this sound familiar?  If so, this is a great time for you to evaluate some of the maturing solutions for hosted e-mail and collaboration services.  Small and medium-sized business have had it hammered in to their heads over the last 10 years that they can now do all the things that large businesses can do with technology:  they can have their own e-mail; they can have web portals, not just plain old websites; they can host web training and deliver presentations to hundreds remotely; they can have instant messaging and unified communications systems that deliver voicemail messages to their e-mail inboxes.

There's a problem though.  All of these solutions require a LOT of maintenance.  And experts to maintain them.  Not to mention that the solutions themselves are not cheap.  They're much more affordable than they used to be, but it's still hard to part with capital.  Didn't we just have a recession?  And are we really SURE it's done?  How can businesses take advantage of all of these technologies that extend productivity and give critical advantages over competition... but do it without the large investments and risky baggage they come with?

Well, they're in luck.  If you really have been hiding in a hole for the last 3 or 4 years you've missed a revolution in computer technology.  It's called Cloud Computing and Microsoft is there in spades with their new Office 365 product.  When I say new though, don't get the wrong idea.  This is not a version 1 product.  Hosted e-mail and collaboration services have been around for several years now.

Back to the business case for Office 365 then.  Let's talk about some of the reasons why businesses have NOT been moving in droves to hosted cloud services up to now.

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Road Block #1: The Solutions are Just Not Mature.
Your business cannot depend on a hosted service you cannot control.  Hosted solutions aren't reliable and are probably not secure.  Also, the service level agreements are not sufficient and they're just not ready for prime time.

What's Changed?
Microsoft deployed its first hosted Exchange e-mail service (the 1.0 product) in 2002, re-released it in 2006 (Exchange Hosted Services - the 2.0 product) and expanded it to include the collaboration product Sharepoint 2007 (Exchange and Sharepoint Online - the 3.0 product), finally reaching the current product - Business Productivity Online Services (or BPOS - the 4.0 product) in November 2008.  Office 365 is expected to release fully in the US around mid-year 2011.

So, if you look at the full history of hosted Microsoft online services, Office 365 is most definitely NOT a version 1 or even version 2 product. It's a mature and well-thought-out suite of services with offerings that are appealing to a broad range of business types and sizes. With everyone's concern (often for good reason) over trying version 1 products it's important to understand just how mature hosted "cloud" services have become over the last 5 years.

Road Block #2: Access to Adequate Internet Connections
Up until recently, many small businesses struggled with obtaining reliable and speedy internet service.  This kept them from considering hosted solutions because of the perceived low quality of those services.

What's Changed?
With the expansion of cable companies in to the business space and the resulting innovation by the phone companies, small businesses now have extraordinary options for high-speed, reliable internet services.  T1?  Old news.  Got fiber?  No?  Check it out.

Road Block #3: Didn't We Buy that Last Year?
Pre-existing investments by medium-sized businesses in some of the very technologies being moved to the cloud have kept them from fully investigating outsourcing those services.  There's a lot of infrastructure that was purchased to enable some of these solutions and you can't just throw it away!

Microsoft Office Communications (OCS) server and Sharepoint have both experienced a renaissance in medium businesses over the last 5 years.  Integration of phone systems with OCSSharepoint has become a major productivity tool on par with e-mail in many offices.

What's Changed?
Many of these investments are now aging.  Staff has been downsized during the recession.  Businesses want to keep these capabilities but do it with less staff and capital investment in infrastructure that needs refreshing every three to five years.  The online solutions have matured and now offer many if not all of the same features as their more traditional cousins.  If it's time for a tech refresh, it's time for an online services evaluation!
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So, with most of the major road blocks removed, why haven't businesses been moving to the cloud in droves?  Expertise.  The industry requires a new generation of consultants and engineers that specialize in Cloud Infrastructure Services.  They're coming, believe me.  Those who see the writing on the wall are already well in to delivering these services to their clients, but full penetration will take some time yet.  There is a fundamental shift in how Information Technology is delivered.  Microsoft calls it "Software Plus Services."  You won't see onsite computer servers, software and services disappear from businesses entirely, at least not for a long while.  But, the slow movement of services to the cloud has begun and will only accelerate.

Back to the business case again then.  You can now:

• Pay for your e-mail, collaboration portal, instant messaging, and meeting/web conferencing solutions via a monthly subscription that is a true expense and saves you from calculating depreciation of assets.
• Obtain all of these services without a major capital investment.
• Bring capabilities that only large enterprises previously had available to small and medium businesses quickly and easily.
• Future-proof your technology - don't invest in new technology that will be obsolete again within 5 years.  These services include all upgrades - performed invisibly in the background and without major interruptions (mostly) in service.
• Access services from anywhere - it's incredibly easy now to open a new office.  Who cares about connecting to the servers in your old office, it's all hosted online!
• Access more and better solutions - the rate of development for new applications, services and solutions on the web is much faster than the traditional model.  A company can create a product and have it deployed to customers overnight now.  React faster with more relevant solutions than ever before.
• Right-size your solutions.  Need more seats?  Add them and they're available within minutes.  Downsize?  Remove some seats and pay less next month.  This is an absolute revelation to seasonal businesses.

How much does all this cost?  An arm and a leg, right?  Not at all!  The entry level product with 99.9% guaranteed uptime and limited support is available for only $6 per user per month.  For larger businesses with more substantial needs or those with higher SLA requirements there are solutions that range in price up to $27 per user per month.  The upper-level options also include a license of Microsoft Office Professional Plus for each user.  This is yet another way to move a capital expenditure in to the expense category.

So, while not every "cloud" offering is worth evaluating, the Microsoft Office 365 services coming to market in the next several months are mature services worth a hard look by small and medium-sized businesses.  Cloud services are ready and they're here.  You should be actively looking at them and figuring out how they will change your business.  You can be sure that your competitors are.

Credit for the history of Office 365 goes to Zdnet's Mary Jo Foley's blog: The road to Microsoft Office 365: The past.

If I were Microsoft I would put Skype in...

Microsoft's acquisition of Skype has a lot of people scratching their heads.  It also has a lot of people thinking about Microsoft product integrations, feature enhancements, revenue opportunities for new advertising, and what to do with Skype's user base.

Well, *IF* I were Microsoft here are a few of the things I would do with Skype:

1. Skype + InTune = A powerful driver to help InTune push in to small and medium sized businesses with multiple locations and centralized support teams or that work with an external partner for support.  Imagine just clicking an icon next to the time in your system tray and clicking "chat with support" or "call support" and having an instant Skype conversation with the support team... regardless of whether you were in your main office, working from home, or in a hotel room half way across the world!
2. Skype + Lync = Compete with Google Voice/Talk as a consumer voicemail solution and you could partner with Verizon, T-Mobile (anyone but Sprint) to provide their voicemail services.  Offer plans and special deals for small businesses to allow their mobile devices to "upgrade" and fully integrate with a hosted Lync service.  You're pulling an Apple here... get the consumers and have them drive the technology in to the business.
3. Skype + Lync = Run virtual "pbx" companies like Grasshopper, Ring Central, Voice Nation out of business by doing the same thing but offering integrated Skype.  If you add on on-site VoIP phones you can then compete with 8x8, Vocalocity and a dozen other hosted VoIP providers.  Skype provides the vital outside-line capability that Lync lacks to compete in these spaces now.
4. Skype + Sharepoint the Microsoft Partner Network = virtual partner teams.  Microsoft makes use of "virtual teams" right now... this is Microsoft employees scattered across multiple teams with different goals and concentrations to do a particular project together.  Do the same thing with partners.  Push Microsoft's infrastructure out to Partners and engage them together with a combination of technologies to enable instant, powerful collaboration across a wide geography, across multiple partners and internal Microsoft teams.
5. Skype + CRM + Lync + Outlook = a leg up over Salesforce.com.  Imagine not only having all your CRM data but being able to click a contact in CRM, hit the Skype button to instantly connect to them and then have a note made in CRM for the date/time for that contact.  All of this without an expensive onsite VoIP phone system.
6. Skype + Outlook = more easy recurring revenue.  Bundle Skype with every Outlook client sold and call it Outlook Everywhere (not to be confused with Outlook Anywhere!) and, wait for it... give it away for free (not Office though).  Enable people to natively connect to others that have Outlook Everywhere.  Here's where the money comes in... if they want to dial out of Skype there's a "Buy Points" button RIGHT IN OUTLOOK and instantly charges their card and shows their remaining personal (or corporate if they're set up that way) Skype credits.  You still get the revenue from selling Office licenses and you could make two versions... one supported by ads in Outlook Everywhere and a corporate one that comes with Office and no ads.
7. Skype + Live Meeting = make them a single product with a "lite" version that lets you attend Live Meetings, use the base Skype features but not host meetings.  Maybe you could use a reduced set of Live Meeting features with just one person at a time.  Allow in-app purchases for single-session upgrades to host larger meetings.  You just pay $3.99 (or whatever) and then your Live Meeting Lite becomes a full Live Meeting and you can host a full meeting for up to 10 users.  Scale it up for larger numbers.  They could still purchase subscriptions for unlimited use as well... perhaps also from within the application itself!
8. Skype + Bing Videos = record Skype video calls straight to Bing Video and then share them either with a small group or with the world!  Have a family reunion on Skype and save it for posterity.  Have a business video conference and instantly archive it for reference later.
9. Skype + Android/iPhone = a Microsoft foothold on competing devices through application software their owners already use.  Do it slowly and unobtrusively and without splattering the Microsoft logo across everything.  Start with "enhancing" Skype mobile with integration to a free mobile LiveMeeting/Lync/InTune client.  Depending on the product synergies you can either target consumers or businesses.  Consumers get a "free" video conferencing client that gives them a powerful voicemail system in Lync.  Marry it with presence features and make it a "social" version of Skype that works well cross-platform with Windows Phone.  For businesses, give them a way to manage those Android/iPhone devices with an InTune client and instant access to their support desk with full remote viewing of the mobile device for support.
10. Skype + Microsoft = lots of product synergies.  This marriage makes lots of sense... if the products are intelligently, no... cleverly integrated.  If Microsoft does it right they can keep the recurring revenue that Skype generates now... everyone loves recurring revenue and subscriptions... they can add features to their enterprise and especially SMB products... and they can become a name to reckon with in the consumer space once again.  No longer is Microsoft just for businesses.

What would you do with Skype, if you were Microsoft?