Microsoft Launches Office 365 for SMB Markets

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Microsoft officially launched the general availability of its Office 365 cloud applications suite on Tuesday at an event in New York — but instead of pitching it for use in the enterprise market as many observers had expected, CEO Steve Ballmer chose to promote it to small and medium-sized businesses (SMB).

“It is impossible to overstate how important the small and medium-sized segment is to the business world — they are responsible for nearly two-thirds of global job growth and employ 1.5 billion people around the globe,” Ballmer said.

Office 365 is Microsoft’s (NASDAQ: MSFT) online suite of enterprise-level applications in the cloud — Exchange Online for email, SharePoint Online for collaboration, Lync Online for unified communications, and the Web versions of its Office applications — called the Office Web Apps. Customers can also optionally take out a month-to-month subscription for the full-blown Office 2010 Professional applications.

And to capture the SMB market, Microsoft has priced Office 365 subscriptions to be attractive to smaller companies that don’t have the wherewithal to have an IT department or even a part-time IT-staffer.

“With Office 365 for small businesses, customers can be up and running with Office Web Apps, Microsoft Exchange Online, Microsoft SharePoint Online, Microsoft Lync Online and an external website in minutes, for $6 per user, per month. These tools put enterprise-grade email, shared documents, instant messaging, video and Web conferencing, portals and more at everyone’s fingertips,” a company statement said.

Like They’re Giving It Away

For instance, that’s the case for Paul Lovette, executive manager and vice president of D&L Representative Payee Services, a two-person business that provides bill paying and financial services for people who receive Social Security checks but who don’t have friends or family to assist them.

Paul, who has an IT background, found Office 365 through the cloud suite’s Facebook page and joined the beta. He works with his mother-in-law, Edwina Donaldson, who works in a separate location.

They use a SharePoint workspace for real-time collaboration, and had been using Google Docs but didn’t like it because of what he describes as “cumbersome formatting.”

“If I didn’t have Office 365, I’d have to worry about email servers, domain servers and file servers [and] I’d have to buy software,” Lovette told Small Business Computing.

“Office 365 handles all of that for me for $6 per seat, per month. You can’t beat that. It’s like they’re giving it away,” he said, adding that it increases his company’s efficiency.

Serving SMBs with Enterprise Capability

“Office 365 reduces complexity and let’s small businesses focus on business without thinking about IT infrastructure,” Elisa Graceffo, group product manager for Office 365, told Small Business Computing. “For the price of a sandwich, you have access to Fortune 100 services.”

Microsoft says that it is building a “massive partner ecosystem” around Office 365. That includes systems integrators, software vendors, resellers, and hosting partners.

In order to service SMBs, Microsoft has signed up more than 20 service providers worldwide so far — including AppRiver, Intuit, Premier Global Services, and CDW — to provide Office 365 hosted online services along with value-added services of their own to the SMB community.

The service providers also include major telecommunications firms such as Bell Canada, Telefonica, Telstra, and Vodafone.

“These companies will package Office 365 with their own services — from Web hosting and broadband to finance solutions and mobile services — and bring those new offerings to millions of small and midsize businesses globally,” Microsoft said.

CDW, for example, plans to launch JetStream, a free, interactive webinar series designed to walk its SMB customers through the process of deploying Office 365.

“Office 365 offers small businesses flexibility and scalability,” Drew Jones, senior manager for solutions and services at CDW, told Small Business Computing.

“A small business can start with email and then move up to collaboration, document sharing or website creation. It’s a whole new level of capability they didn’t have before,” Jones said.

Stuart J. Johnston is a contributing editor at, the news service of, the network for technology professionals. Follow him on Twitter @stuartj1000.

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