Official Launch of Office 365 Heightens Cloud Market Competitiveness

Other Posts
Jun 28, 2011

Although Microsoft’s official launch of their cloud offering didn’t create as big of a buzz as Apple’s iCloud, Microsoft CEO Steve Ballmer still had plenty of enthusiasm for Office 365 during his 30 minute announcement this morning in New York.

The key themes during the presentation were collaboration, productivity, and scalability. Ballmer highlighted the features of real-time collaboration tools, like virtual meetings, editing documents, and sharing calendars with team members, all which can be done on PCs and mobile devices. For Microsoft, good collaboration is about instant access and is critical to business growth, which is key for businesses of all sizes. (If you want a recap of the announcement with product demos, you can watch it here).

And that brings me to the heart of Ballmer’s presentation today — SMBs. If viewers took away anything from watching the webcast, it was Ballmer telling us how Office 365 is a great solution for SMBs, where users can cut back on IT investments and elminate the hassle of servers. This was a very interesting approach from Microsoft, a company who dominates the enterprise space and typically tailors its products to larger organizations.

But I’m not surprised. For the remaining ten minutes or so of his presentation, Ballmer discussed about four success stories of SMBs using Office 365, even quoting one company in New Zealand where they saved about $100,000/year using the cloud service. He also stated that more than 7% of beta testers were SMBs.

Microsoft’s emphasis on the SMB market tells us a few things. First, Microsoft is trying to reinvent themselves in such a ‘me’ environment. For example, you have services like Dropbox, Box, and even the upcoming iCloud all focusing on customer needs. And cloud offerings are inherently designed for smaller organizations, as there is much less risk and higher ROI involved for this market if they switch to a cloud-based platform. So why would Microsoft promote Office 365 to enterprises when SMBs/end-users are the real market to target? (Besides, Microsoft has already saturated the enterprise space). A combination of Microsoft’s advantage of a familiar user interface and their campaign to sign-on SMBs solidifies Office 365 in such a competitive cloud market.

Next, Microsoft has recently been getting some flak from Google on their pricing model complexity and functionality. Yesterday, Google posted a blog entry titled, “365 reasons to consider Google Apps.” Ballmer’s presentation may not have been tailored to take a direct hit at its major cloud competitor, Google, but he did a decent job addressing the benefits and advantages of Office 365 for SMBs (a market that Google has captured fairly well with their Google Apps).

Interestingly, both Google and Microsoft are attempting to beat each other at their own game. Google aiming to reinvent themselves as a business application tool; Microsoft aiming to market themselves as a SMB solution. And now that Microsoft officially launched their cloud offering, the game is only going to get more competitive.

More blogs from

2016 InfoTrends, Inc.

WordPress Appliance - Powered by TurnKey Linux