San Francisco — Aiming to bolster its hosted productivity-focused software applications from the cloud, software monopolist Microsoft shoved another step onto Google’s turf, on Tuesday announced that it will bundle its Office Web Apps system with several other familiar business applications in an online collection it calls “Office 365,” in an attempt to further shift away from the packaged based software on which the firm’s fortunes were built.
Lately, Google Apps has been making inroads in the business market by seriously undermining Office products, but Microsoft is not taking the attack on this core market lying down.
What once went by the boringly attributed Business Productivity Online Suite will now be known as Office 365, Microsoft announced at an event at the St. Regis Hotel here. The St. Regis is owned by Starwood hotel chain, one of Microsoft’s early customers for its hosted online services.
Microsoft Office division President Kurt Del Bene announcing the launch of Office 365 on Tuesday. (Credit: Ina Fried/CNET)
The Office 365, embraces a significant shift from the Web-based productivity apps Microsoft previously offered under the Windows Live banner. The new version of the suit–is essentially a turnkey productivity solution, in some respects similar to Google Apps, that depends upon the ability to use Microsoft’s tried-and-tested productivity suite, complete with access to email, collaboration and communication servers, without having to manage any infrastructure.
“We embraced the cloud because we actually believed it would change the way people work,” said Kurt DelBene, the new president of Microsoft’s Business division, at a Tuesday news conference in San Francisco.
DelBene added: “Customers will reap the best of everything we know about productivity 365 days a year.” “People can focus on their business while we and our partners take care of the technology,” he said.
Previously, Microsoft offered software packages to companies, which paid upfront price just as you would buy a boxed copy of software in a shop. Now, Office 365 bundles together Microsoft Office, SharePoint, Exchange and Lync programs that can be availed by “subscription” as online services, relieving companies the expense and hassle of buying, installing and maintaining the software on their computers.
For businesses with fewer than 25 employees, Microsoft is pricing the service as low as $6 per user per month, which comprises of Office Web Apps — Word, Excel, PowerPoint — with SharePoint for collaboration, Exchange for e-mail and Lync for communications.
Software packages tailored to the needs of large businesses will be available from $2 per month for hosted e-mail only to $27 per user per month for the most full-featured Office which includes the full Office Pro Plus desktop suite in addition to Sharepoint, Exchange, communications server tools and the online versions of Word, Excel, PowerPoint, among other tools.
“This is a wonderful growth opportunity for Microsoft,” said Microsoft senior vice president Chris Capossela said while demonstrating Office 365 at a press event in San Francisco.
“We think one size does not fit all,” said Capossela.
The company is starting a limited beta with a few thousand customers now, with the service planned to be broadly available next year, and it also plans to migrate its service for universities–Live@edu–to a version of Office 365 for education.
The new Office 365 is the answer to Google Apps, a Web version of word processing and spreadsheets that Google offers to businesses for $50 per year. The move is a big bet for Microsoft. Office, in addition to Windows, is one of the two major profit mongers for the company. Offering it as a subscription has the potential to make the company’s total sales larger and more predictable, but also runs the risk of cutting into profits.
“Traditionally, Microsoft has only competed in the software space. With this, we are actually in a much larger pool of IT spend because we are in a place to run their network,” said Capossela.
“We believe it is one of the most impactful transformations that will happen in our generation,” DelBene said of the cloud.