Microsoft is promoting Office 365 as a value-priced productivity solution for any size company. The launch of Office 365 is a major push by Microsoft into cloud computing and will directly compete with Google Apps and other web-based productivity software suites. Companies that provide Office functionality to workers with PC-based software and/or on-premises servers, should consider online solutions. These solutions are especially helpful for small and mid-sized businesses (SMBs) that don’t have or want the IT resources to support in-house server solutions. However, be careful that the convenience of a Web-based solution doesn’t unduly influence a business decision.
The Microsoft cloud solution, Office 365, is a great marketing strategy that can help your small business be more productive. Office 365 is software-as-a-service (SaaS), hosted by Microsoft and available to users online by monthly subscription. Clients choose any or all of an application suite that includes the company’s popular Windows Server solutions, Exchange, Sharepoint, and Lync, and “lite” Web-based versions of its Office suite – Word, Excel, and Powerpoint.
All of the Microsoft server applications have been available, separately, as hosted solutions from many service providers, and Microsoft already offers access to its Office suite online. However, the reality is, that many knowledgeable workers still want the security and convenience of a PC-based productivity suite on their personal desktop or laptop computer, in addition to lite versions available online. Microsoft addresses that reality in Office 365 by bundling a client license for its Office suite with the license for online access. Users get the best of both worlds for a very attractive monthly payment that can be cancelled at any time.
SaaS solutions create value from economies of scale and Microsoft certainly has those. However, many large companies do as well, and for them, the ongoing cost of monthly subscriptions could be higher in time than the cost to implement an in-house solution. Also, for companies that must already maintain significant IT systems for business purposes, adding Microsoft’s Server solutions to that responsibility may be cost effective.
Yet, the major disadvantage of online solutions is maintaining data security – your data is stored in a cloud hosted on another company’s servers. If compliance with data security and email archival requirements are a priority concern, it may be more reassuring to implement in-house server solutions. However, consider that Office 365, Google Apps, and others are able to deliver hybrid solutions that allow users to execute on the hosted applications while storing data on their in-house servers.
Finally, the obvious should be stated: online solutions do not work when users can’t get online. If the users’ Internet connections are lost or they travel beyond its range, they can’t work. On the other hand, consider whether users could get much work done, even having access to Office on their PC, without an Internet connection. Without online information sources, they may not be able to create that Word document, Powerpoint, or spreadsheet.
The benefits of SaaS solutions are:
- No installation costs
- Minimal, if any, configuration
- Little upfront investment
- No costs to support, maintain, and upgrade the system.
Clients can decide to use Office 365 in the morning and their users will be productive that afternoon. The system will virtually always be available; workers will have a tech support person to call; the system will be upgraded as new software versions are released – all without any effort or cost to the customer beyond the monthly subscription fee.
For SMBs, the advantages are greater. For the IT department, user support – their most time-consuming and frustrating task – is transferred to the service provider so that they are able to focus on supporting the company’s critical business applications. Also, supporting all three Microsoft Server solutions is a significant challenge that’s beyond the capability of the typical SMB’s IT department. Instead, most simply deploy the Exchange email server and PC-based Office applications. For most SMBs, migrating to a hosted solution produces immediate budget savings and predictable long-term costs, while providing instant access to more user functionality than they could otherwise afford
Which is Right for Your Company?
Business owners should compare the ongoing cost of online subscriptions to their direct and indirect costs to purchase, host, and support the hardware and software to deliver those applications in-house. If you have critical data security needs, consider whether a hybrid data storage solution can work for you. Perhaps, you should also weigh the disadvantages of hosted data storage versus the expertise of the service provider compared to your in-house staff. For many companies, that analysis will reveal a decided advantage for the hosted applications solution.