The smoke has cleared from Microsoft’s launch of Office 365. Now small and midsize businesses (SMBs) are ready to cut through the hype and figure out what’s on offer.
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Office 365 isn’t one-size-fits-all–it comes in a variety of tiers. If you’re just looking to replace a hosted Exchange platform or legacy server, you’ve got different needs–and different price points–to consider, compared to an IT manager looking for a complete online productivity and collaboration suite. “It depends on the particular situation for the business,” said Tim Crawford, CIO of All Covered, in an interview. “Typically, if Google Apps isn’t going to work for you, Microsoft Office 365 isn’t going to work either, unless there are some specific application requirements that Google Apps just doesn’t fit the bill for.”
Crawford said that currently both Google Apps and Office 365 come up short for some SMBs in two critical areas: support and the one-stop-IT-shop approach that some smaller firms crave. He also said visibility into downtime and other technical issues is also lacking.
“365 and Google Apps are great for what they are, but typically SMBs are looking for a lot more,” he said. “For some, it will be great. Others, it’s just not going to work out well for them because it’s not going to meet their business needs.”
When cost is the overriding factor, Google Apps is likely to win out. Its $5 per user, per month price undercuts Office 365’s comparable plan by a buck, and companies willing to pay up front can save a bit more with Google’s $50 per user annual plan.
Remember, too, that the $6 per user, per month plan Microsoft is pushing primarily to small businesses includes Office Web Apps–not Office Professional Plus, the full-featured online version of the traditional desktop apps. The latter is included with the midmarket and enterprise plans–and it costs more. The first tier that includes Office Professional Plus runs $24 per user, per month.
That means that while the small-business plan could be a good complement for mobile, distributed SMBs that intend to keep their desktop Office licenses, it’s not as useful for firms looking to go all-in on cloud or that otherwise require the full-blown Web versions.
The SMB without budget concerns is a rare beast, but price isn’t everything. Office’s long-standing foothold in business environments means both IT pros and end users are comfortable with its applications. That counts, according to Analysys Mason analyst Steve Hilton.
“As long as SMBs are familiar with Microsoft user interfaces–and they are today–Microsoft will sell product,” Hilton said in an email interview.
That favors Microsoft, of course, but it doesn’t necessarily favor the Office Web Apps–or other productivity apps that present a modified experience.
“[Users] are just so accustomed to [Office] being the gold standard, or maybe even the baseline standard,” All Covered’s Crawford said. “When you’re trying to sell something that doesn’t have all of those features, and is missing something that they really use, then you’re stuck.”
There’s no rule that says SMBs have to choose between Microsoft and Google–it’s conceivable that a company could have good reasons to use both. (Here’s one example, and here’s another.) Nor is there a rule that says a business has to use either vendor; alternatives like Zoho do in fact exist.
There isn’t one, unless you’re an existing Business Productivity Online Standard (BPOS) suite customer. But even then, you’ve got a full year to transition to 365. A business that doesn’t have a pressing need, on the other hand, might be best suited to see how 365 performs in the field before jumping into the fold. As with Microsoft’s on-premises software, expect there to be updates over time.
“I personally would not recommend anyone to 365 until it’s a little more tested,” Crawford said, noting that business-critical applications like email can’t be gambled with. “We just need a little bit of time before any of us could honestly say: Yes, it’s ready for prime time.”
SMBs that handle their own IT will determine their own needs in areas such as cloud productivity and collaboration apps. But plenty of smaller companies look to third-party providers like Crawford’s All Covered–which was acquired earlier this year by Konica Minolta–for external IT support. In those cases, other factors come into play, including which vendors your IT provider works with.
Likewise, smaller businesses–particularly those that fit the “S” in SMB–that rely on large vendors like Verizon for technology bundles will be beholden to the partnerships those providers have in place. Verizon, for example, currently promotes Google Apps with its small business bundles. A Verizon spokesperson said it doesn’t currently sell Office 365, though the telco does offer Verizon UC&C with Microsoft Online Services to SMBs.
In general, though, Microsoft could have the edge with third-party providers. Said Hilton: “Microsoft is the market follower, not the leader in new cloud-based apps. Microsoft is learning how to position itself in this brave new world against the likes of Google, Zoho, and all the social networking companies. And frankly [their] best move so far has been to seek out enhanced channel relationships with the communications providers like Comcast, Vodafone, Orange, Telstra, and others to offer Microsoft cloud solutions.”
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