Microsoft does a 365 on clouds

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Microsoft may have become slow but definitely not obsolete.

On Tuesday, Microsoft Chief Executive Steve Ballmer is scheduled to launch Office 365, a combination of communication, collaboration and productivity software delivered via the Internet. Microsoft, which is holding an event in New York to celebrate the debut, calls the suite of services the “next generation cloud service.”

This is a move that only ramps up the software giants competition not only with companies such as Google Inc and VMware Inc. but with itself.

Will history be repeated?

This move reminds many experts of the battle between Word Perfect and Microsoft Word, 28 years ago.

Microsoft challenged the dominant productivity suite and eclipsed its popularity within a few years.

Twenty eight years later, Microsoft enters a new platform with Word (and Office) to once again challenge a dominant application.

Its rival this time is not an application provider, but a platform company, which has abundance of resources and can potentially outspend Microsoft in marketing its product.

Needless to say, Google also owns a few of the most popular places on the web to advertise its products, which provides the company with a powerful marketing advantage.

Over Crowded

Microsoft enters a pretty over crowded space with Office 365.

Google Docs from Google and VMwares Zimbra email, for example are attracting huge number of companies seeking tools that work not only from desktop computers but also on smartphones and tablet computers.

Some say Microsoft may be late, while others there is always room.

Microsoft was the power broker in the PC era, but whether it’s able to get on top of the cloud will likely depend on what Mr. Ballmer introduces Tuesday.

Market reaction

Microsoft climbed 4.2 percent to $25.33 before a presentation tomorrow by Chief Executive Officer Steve Ballmer, who is expected to introduce Microsofts next-generation cloud service for its Office software.

Self Competition

Well from the looks of things it seems that Microsoft may be its biggest rival.

It is estimated that nearly nine out of every ten computers runs one fourteen versions of Office the company has released since the softwares launch in 1989.

The task now is to convince the estimated one billion computer users to switch to Office 365, without disrupting the legacy version that is financing the transition.

Cloud Computing

Long gone are the days when the office was a room with furniture and fixtures.

People are looking to increase the use of mobile devices for work. This allows them to make any environment their office, but requires IT departments to coordinate a growing array of hardware.

As Cloud services in part are able to address this dynamic, providing the most cost effective way to link all those gadgets, its growing at phenomenal rate.

Profitability

There is a considerable amount of profits that can be generated in the cloud.

The International Data Corp (IDC) estimates that by 2012 customers are expected to spend $42 billion on cloud computing.

The market for cloud computing is expected to grow more than 27% annually for the next five years and reach $73 billion by 2015.

It also estimates that by 2020, a significant portion of the Digital Universe will be centrally hosted, managed, or stored in public or private repositories that today we call cloud services. And even if a byte in the Digital Universe does not live in the cloud permanently, it will, all likelihood, pass through the cloud at some point in its life.

Cloud computing, which uses networks of computers to store and deliver applications and content, will power a wave of technology expansion, says IDC’s vice president and chief analyst, Frank Gens.

“Cloud services are interconnected with and accelerated by other disruptive technologies, including mobile devices, wireless networks, big data analytics, and social networking,” said Frank Gens, senior vice president and chief analyst at IDC. “Together, these technologies are merging into the industry’s third major platform for long-term growth. As during the mainframe and PC eras, the new platform promises to radically expand the users and uses of information technology, leading to a wide and entirely new variety of intelligent industry solutions

He estimates that by 2015 one of every seven dollars spent on technology will be connected with cloud computing and “the winners of the cloud platform wars will likely be the new power brokers of the IT industry.”

Popularity

We are seeing an acceleration of adoption of cloud computing and cloud services among enterprises and an explosion of supply-side activity as technology providers maneuver to exploit the growing commercial opportunity,” said Ben Pring, research vice president at Gartner. “The scale of application deployments is growing; multi-thousand-seat deals are increasingly common. IT managers are thinking strategically about cloud service deployments; more-progressive enterprises are thinking through what their IT operations will look like in a world of increasing cloud service leverage. This was highly unusual a year ago.”

Gartner estimates that, over the course of the next five years, enterprises will spend $112 billion cumulatively on software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS), combined.

“After many years of germination, most notably in the SaaS arena, the core ideas at the heart of cloud computing such as pay for use, multi-tenancy and external services appear to be resonating more strongly,” Mr. Pring said. “In part, this can be explained by macroeconomic factors. The financial turbulence of the last 18 months has meant every organization has been scrutinizing every expenditure. An IT solution that can deliver functionality less expensively and with more agility (remembering that time is money) is hard to ignore against this backdrop.”

More fundamentally, cloud computing has become more material, because the challenges inherent in managing technology based on the principles of previous eras complex, custom, expensive solutions managed by large in-house IT teams have become greater, and the benefits of cloud computing in addressing these challenges have matured to become more appropriate and attractive to all types of enterprises.

Office 365

Office 365 blends many existing Microsoft utilities, which currently are offered online la carte, into a single cloud offering.

In a major break with the packaged-software era, customers will be able to buy only what they need.

This eases the transition for users running older versions of Office on desktop systems, allowing them to get new features for their mobile devices without the cost of full conversion.

Microsoft made it easy for it bigger corporate clients. Earlier this year Microsoft modified its agreements with its largest customers that grant licenses to companies with thousands of users. The changes allow maximum flexibility to switch users from license use, which covers the use of software on company computers, to the cloud service.

The feature could allow clients months of Office 365 usage free until their corporate agreements come up for renewal.

Risks

Like any business venture an element of risk is always involved.

Risks were made aware one morning when some subscribers to current Microsoft online services in the Americas region experienced intermittent outages. Other companies, like Amazon, have experienced similar outages.

While Microsoft has been adjusting its strategy, cloud pioneers such as San Francisco-based Salesforce.com Inc. and Seattle-based Amazon have forged ahead.

Salesforce.com has added a communication technology called Chatter to its service to allow clients to communicate within its sales management cloud service.

Amazon’s Elastic Cloud has attracted enterprise customers because of its ability to scale up capacity to match peaks in client demand.

Microsoft’s biggest rival, Google, is encroaching on Microsoft’s core Office franchise with the spread-sheet and word-processing utilities within its Google Docs cloud service.

Microsoft itself has yet to come up with a solution.

Googles reaction

Google posted a note this morning why Apps is the much better cloud productivity suite than Office 365 is.

  • Google says that Apps is designed for teams, while 365 is for individuals.
  • Apps is free or has a simple price structure, while 365 has confusing fees and is expensive.
  • 365 is for the desktop, while Apps is for the web.

As it is tradition for Microsofts competitors, Google cannot forget the easiest argument against using a Microsoft product: Office 365 is built for Microsoft. Apps is built for choice.

Peoples Reaction

Arabian Gazette spoke to users of Microsoft and Google regarding the cloud technology of both companies.

It is the general consensus that Office 365 would be familiar to offline Office users. However the production process and the management of the document is more complicated and requires more click that Google Apps.

On the other hand Google aps feels less fine-tuned and refined. Its less organized and kinda geeky.

Both the solutions are capable of handling productivity needs as long as an online connection is available. However only 365 has offline features, while Google still havent provided one, it would be available only end of the year.

The most serious question in everyones mind is the security. With the numerous hacketons that have been taking place, users are little bit worried.

What ever said and done, competition breeds efficiency.

Thereby Microsoft launching 365 will make all the other cloud providers to be on their toes.

Source: Wall Street Journal, Bloomberg, Virtualization Technology News and Information, Gartner Inc. IDC

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