In June 2011, Microsoft took the big step of bringing one of its most successful software products, the Office suite, into the Cloud.
It was a bold move by the company, which has occasionally shown hesitation towards the Internet, preferring to following in the footsteps of the competition instead of being an early technology adopter. However, the launch of its online enabled Office 365 meant that Microsoft became a serious player in a rapidly growing, yet still niche, field.
Looking back at the launch of the Cloud-based suite, Ovum research director, Steve Hodgkinson, characterises the advent of Office 365 as a "necessary strategy" for Microsoft. "It needed to make a transition strategically towards Cloud-based service delivery," he said. "It's part of their strategic commitment to do that, so in that sense they had to start somewhere."
Microsoft Australia Office 365 lead, Isabel Boniface, is a new addition to the Microsoft family, having joined the company two years ago. However, Boniface came onboard at Microsoft in time for the high profile launch of Office 365 in Australia, which took place at Sydney's Telstra Experience Centre.
Following the product's release, Boniface said adoption by the local market "definitely exceeded" Microsoft's expectations. "It's on track to be one of the fastest growing business offers in our history," he said.
Whether Office 365 exceeded Microsoft's expectations or not, Hodgkinson said it is better to look at Office 365 in the context of the momentum behind the growth of Cloud services. "In that sense, it is a subset of a small, but fast growing market," he said. "Maybe expectations for it were higher than that, but the reality is that Cloud services are still a small subset of the market but on the rise, and Office 365 sits there."
Two years have passed since Microsoft launched Office 365 in Australia, leading to speculation to whether the product has managed to maintain the momentum it generated in the wake of its widely publicised release. Even with the passage of time, Boniface said there remains a strong interest in Office 365.
"Businesses large and small are looking to Cloud services not just to lower costs, but to enable new ways of supporting a distributed, mobile workforce to be productive and more effective," she said. When it comes to what types of customers are adopting the suite, Boniface said it ranges from SMBs like Calibre Real Estate to mid-market customers like V8 Supercars, all the way to larger enterprises such as Caltex.
In the past 12 months, Microsoft has reported a 150 per cent increase in SMB-sized businesses using Office 365. "One in five Microsoft enterprise business customers are now using Office 365, which is up from one in seven last year," Boniface said.
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