Netmail Blog

Getting Sold on Microsoft Office 365

Posted by Frederic Bourget

May 20, 2014 2:08:00 PM

Why is my Microsoft Rep only trying to sell us Microsoft Office 365? Do I have to go to the cloud?

For Microsoft, the stakes are tremendous. The Microsoft Office Suite, which has been and still is at the center of Microsoft's profits, has hit a wall. For years, Microsoft had been wondering how to add value so that you would buy the next version. But this has become more and more complicated. There are diminishing returns for end users and the barrier to change for new releases are getting closer and closer to that return.

While this was happening, Microsoft's cloud competitors have developed a new model of applications. A model where incremental upgrades are transparent and users pay for a service instead of a license. They pay not only for software but also computing resources accessible from anywhere. This is compelling.

Why would anyone want to go away from the well-known Microsoft Office Suite ? It's not that we don't want to continue using it.. It's that we are no longer using our PCs. We use mobile devices. As I write this post on my iPhone I can confirm. The current Office Suite has been designed for mouse controller, not touch. Not to mention that mobile devices were not designed by Microsoft. All of this represents a major shift in the market--one that leaves plenty of room for others to come in.

What is Microsoft's choice? They are in a similar situation to when Netscape was the OS of the web or when Apple launched the Macintosh. They need to embrace quickly the new models or become irrelevant. So here is Microsoft's response: subscription licenses, hosted services, Nokia acquisition. The last move, and probably the toughest decision, is mobile office applications for competing platform. The marketing machine will make sure that the message is clear though: O365 is the only way to go. Why? Because, from a market share perspective, Microsoft needs to make Google and Apple irrelevant in office productivity... before it is too late. The numbers (FY2013) show that the overall strategy may be working. 7% growth on commercial revenue is significant when talking billions of $$.

So for your email system, what is the choice? Moving to a subscription model probably won’t be a choice for long. You can probably delay it using lack of innovation as an excuse, but sooner or later, end of support and security patches will catch up with you. You will need upgrades and you will have to renew on the new business models. BUT you still have a choice as to who will own your data. You can still install Microsoft products on premise. Installing on premise, in the cloud, or as a hybrid is at the heart of the differentiating story for Microsoft against Google, and it won’t go away.

In the end, the choice is still yours. Microsoft imposes what the sales team will try to sell to you. But it does not impose what you will choose. Going to the cloud should be an economic decision based on your real cost of operation and business drivers. We have customers of various sizes who have made the cost analysis and decided to stay on premise. Others who have chosen the cloud. Analyse your options carefully. You have the choice and can make email as simple on premise as much as in the cloud.

Topics: Office 365, Cloud, Simple, Microsoft Exchange