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Office 365 in Australia: the story so far

Patrick Budmar | June 6, 2013
In June 2011, Microsoft took the big step of bringing one of its most successful software products, the Office suite, into the Cloud.

A rush of blood to the head
When it came to the launch of Office 365 for the Australian market, the key differentiator was Telstra's involvement with the rollout of the product. In this case, Telstra's T-Suite had an exclusive role in the distribution chain for the software. Microsoft's partnership with Telstra is now reaching its forth year, and Boniface said it led to a successful rollout of the Cloud-based product.

"The great strength in the partnership is that together we bring together world class products and services on a world class network to help Australian businesses increase productivity," she said. "It was a compelling proposition at launch and it remains a compelling proposition today."

T-suite's exclusivity with Office 365 caused some industry pundits to question the move at the time, particular when it came to the channel. Hodgkinson's position is that these types of closed deals are "not necessarily the right way to go," at least from a marketing perspective. "It is better to keep all of the options open," he said.

However, Hodgkinson admits that Telstra has been reporting strong growth of services in T-suite. This growth is often attributed to Office 365 adoption through T-suite. "In that sense, the exclusivity seems to be working for some sections of the market," he said.

Hodgkinson is referring to markets where Telstra has a strong "business services type of footprint" through its various business centres and distribution channels.

By partnering with Telstra, Boniface said the aim was to pass on the benefits to Australian SMBs. "Our alliance means that they have access to products and services that were formerly only available to large companies with well-resourced IT budgets and infrastructure," she said.

"Many of Australia's small and medium businesses turn to Telstra for their communication needs, so there are natural synergies for Microsoft and our partner community to offer additional value through Office 365 with Telstra."

Another issue that was voiced around the Office 365 launch window was the higher prices in Australia compared to the US, with the topic of IT pricing evolving in recent months into a full blown parliamentary inquiry that has involved several vendors.

Hodgkinson explains that the increased prices in Australia are primarily due to the T-suite partnership. "Telstra is offering a certain degree of local support, so there is a local value-add," he said.

Due to that, Hodgkinson said it not fair to compare the Australian package to what can be accessed over the Internet from the US. However, he is unable to speculate whether that cost difference is justified in the actual support offered by Telstra.

"T-suite in Office 365 is primarily targeting an SMB audience, one that is not going to have a rush of blood to the head and suddenly buy it online," he said. Since a "degree of handholding" and support is necessary, T-suite is suited for that purpose.

"So Microsoft Australia's pricing is in line with the way their market operates in, with customers more willing to pay more for better support and assisted implementation," Hodgkinson said


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