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Office 365 'momentum' announcement met with some skepticism

Juan Carlos Perez | Dec. 2, 2011
Microsoft's declaration this week that Office 365 is enjoying unprecedented levels of sales success didn't fully convince some industry experts who were expecting the company to back up its claims with more concrete figures and who feel it's too early for a victory lap.

It has been particularly encouraging to see many potential customers proactively call to ask about Office 365, in addition to the sales leads the company's sales staff generates, he said.

"Customers are hungry to change the way they do business, so we're happy to be at the right place and the right time," Noel said, referring to the broad interest in cloud-hosted software for communications and collaboration.

Noel does acknowledge that Office 365 is a low-margin business for resellers like, which get an 18 percent cut of the customer fees in the first year, a commission that drops to 6 percent per year thereafter.

The key for resellers, he said, is to beef up those margins by selling complementary services to customers, such as data migration and technical support not only of Office 365 but also of related products, like mobile devices and other software tools.

At this point, some areas where Office 365 could be better, from's perspective, include a beefing up of the telephony features in the suite's Lync Online IM, a voice and video communications application. would also like to see Microsoft provide more tools and processes to automate migrations from BPOS implementations to Office 365, a process that has found to be mostly manual, lengthy and error prone.

In addition to touting the small-business adoption of Office 365, Microsoft on Tuesday also made the suite available for 30-day free trials in 22 new markets, including Argentina, Taiwan and South Africa. Office 365 is fully available in 41 markets. Microsoft also rolled out more than 30 product enhancements to the suite.

Office 365 comes in several different packages that include an email-only plan that costs US$4 per user per month, a fully loaded suite with Lync Server on premises and Office 2010 Professional Plus for $27 per user per month, and a version for small businesses with 25 or fewer users that costs $6 per user per month.

Juan Carlos Perez covers search, social media, online advertising, e-commerce, web application development, enterprise cloud collaboration suites and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.


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