Microsoft Office 365: Frequently Asked Questions - Updated

By samdizzy

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Portions of this FAQ first surfaced on MSPmentor in March 2011. Here’s the updated version.

Q1: What is Office 365?

TalkinCloud: Office 365 is the successor to Microsoft BPOS (Business Productivity Online Suite). Office 365 is a SaaS platform that includes Exchange Online, SharePoint Online, Lync Online and other cloud applications hosted and managed by Microsoft for end-customers.

Q2: When did Office 365 debut?

TalkinCloud: Office 365 debuted in 40 markets on June 28, 2011. Introduced in beta in 2010, more than 200,000 organizations signed up and began testing it, according to Microsoft.

Q3: How much does Office 365 cost, what does it include and who does it target?

TalkinCloud: Technically, that’s three questions. But here are the answers:

Office 365 costs $2 to $27 per user per month. With Office 365 for small businesses, customers can run Office Web Apps, Microsoft Exchange Online, Microsoft SharePoint Online, Microsoft Lync Online and an external website for $6 (U.S.) per user, per month.

Office 365 seems poised to target everyone from SMB customers up to enterprise customers. In the SMB market, Microsoft states:

For enterprise customers Microsoft states:

Q4: What type of commission (up front and recurring) can channel partners earn for selling Office 365?

TalkinCloud: I am double-checking Microsoft’s partner commission strategy to see if it differs from the former BPOS commission structure.

Q5: Does Microsoft intend to kill its channel and sell Office 365 direct?

TalkinCloud: I think Microsoft remains committed to its channel … though there are going to be some pain points in the months ahead. On the upside, it’s safe to expect Microsoft to more clearly communicate its channel commitment at Microsoft Worldwide Partner Conference 2011, starting July 10 in Los Angeles. Also, the company has a pretty impressive channel team.

All that said, Microsoft concedes that it will compete and cooperate in the cloud. Yes, Microsoft will sell Office 365 direct. But those that resell Office 365 can also become a partner of record, Microsoft says, ensuring that the partner retains end-customer account control.

Q6: Can partners white label Office 365 and manage customer billing?

TalkinCloud: No. And that’s a big concern for some — though not all — channel partners. Generally speaking, most VARs and MSPs I hear from (A) want to brand third-party cloud services as their own and (B) want to maintain the billing relationship with end customers. So far, Microsoft has not introduced either option. That’s ironic, especially since rival Google allows Google Apps Authorized Resellers to manage end-customer billing if they so choose.

Microsoft Channel Chief Jon Roskill is listening closely to the cloud billing feedback from partners. My theory: Microsoft wants to successfully deliver Office 365 globally before definitively addressing the billing debate. Also of note: Parallels is partnering with Microsoft to extend cloud customer billing capabilities to really big service providers, like telecom companies. We’re watching to see if that Parallels billing capability ever gets extended to smaller VARs and MSPs.

Q7: Are any channel partners embracing Microsoft’s cloud strategy and Office 365?

TalkinCloud: Yes. So far, Microsoft’s top 10 U.S. cloud channel partners apparently have moved more than 1,000 customers to Microsoft’s cloud and BPOS services. TalkinCloud believes all of those top 10 cloud partners will offer Office 365 to their customers, either now or within the near future.

Also, on June 28, 2011, Microsoft announced that more than 20 service providers around the globe plan to bring Office 365 to their customers this year. Bell Canada, Intuit Inc., NTT Communications Corporation, Telefonica S.A., Telstra Corp. and Vodafone Ltd., among others, will package and sell 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.

Q8: Should MSPs compete in the hosted Exchange market vs. Office 365? If so, how?

TalkinCloud: Generally speaking, it seems like email, storage and security are three of the top services that SMBs are shifting to the cloud. Even if you can’t make a ton of money from hosted Exchange — margins could get tight –  I suspect most MSPs need to offer some sort of SaaS email service to increase customer stickiness.

But here’s the challenge: It’s early in the cloud game for end-customers… they’re just getting started with cloud computing. But it’s late in the game for hosted Exchange providers. If you don’t already host your own service, I think the wisest option for SMB MSPs is to white label or resell an existing third-party service. Options include:

Q9: When did Microsoft originally announce Office 365 and where can I find the press release?

TalkinCloud: Microsoft announced Office 365 on October 19, 2010. The Microsoft press release is available here. The production platform debuted June 28, 2011.

Q10: How can VARs and MSPs potentially compete with Office 365?

TalkinCloud: In addition to the options mentioned in Question 8 above, check out the TalkinCloud article called: How to Compete With Office 365.

Bonus Question: Does TalkinCloud expect Office 365 to be successful?

TalkinCloud: First, let’s assume Office 365 works as advertised when it arrives.

Got More Questions?

If you have additional questions about Office 365 and Microsoft’s cloud strategy…

We look forward to your questions and insights.

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