Microsoft Goes Deeper into the Cloud with Office 365

In a move meant to keep its Office cash cow earning ever more income, even as the IT world moves towards computing in the cloud, Microsoft introduced a set of cloud-based computing offerings Tuesday that it says are scalable from the smallest to the largest organizations.

Dubbed Microsoft (NASDAQ: MSFT) Office 365, the core offering combines Office Web Apps on the client side with Exchange Online, SharePoint Online, and the newly rebranded Lync Online on the back-end — all on a subscription basis.

“Nothing says ‘productivity’ better than Office,” Kurt DelBene, the recently promoted president of Microsoft’s Office Division, told a crowd of media attending the launch event in San Francisco.[login]

The offering begins beta testing with “a few thousand organizations” on Tuesday in 13 countries and regions worldwide with general availability in a total of 40 countries scheduled for next year, company statements said. Initial testing will be done in Canada, France, Germany, Hong Kong, Ireland, Italy, Japan, Mexico, Puerto Rico, Singapore, Spain, the U.K., and the U.S.

“With Office 365, your local bakery can get enterprise-caliber software and services for the first time, while a multinational pharmaceutical company can reduce costs and more easily stay current with the latest innovations,” DelBene said.

An edition of the package for small businesses and professionals with 25 or fewer users can get the service for as little as $6 per user per month, although that does not include the desktop version of Office — only the Office Web Apps — although the full version can be added on a pay-as-you-go option.

User access can be accomplished via popular browsers and using smartphones that support Microsoft’s ActiveSync, including iPhones, some Android phones, and Windows Phone 7 — or via desktop applications.

Meanwhile, Microsoft will also offer versions of the bundle for enterprises and mid-sized businesses that start as low as $2 per user per month for basic e-mail service.

However, with options, it can be a bit more expensive.

“For $24 or 22.75 euros per user, per month, organizations can get Office Professional Plus along with e-mail, voicemail, enterprise social networking, instant messaging, Web portals, extranets, voiceconferencing and videoconferencing, webconferencing, 24×7 phone support, and on-premises licenses,” company statements said.

“Office Professional Plus can be purchased standalone or as an add-on to any Office 365 offering for $12 per user per month, which includes Office Web Apps,” a Microsoft spokesperson told in an e-mail.

Next year, Microsoft also plans to add its Dynamics CRM Online cloud-hosted package to the mix.

Chris Capossela, senior vice president of Microsoft’s Information Worker Product Management Group, told the audience that Microsoft’s service level agreements (SLA) will promise uptime of 99.9 percent.

“We’ve dedicated tens of thousands of engineers to support Office 365,” DelBene added.

Microsoft officials also said that the cloud-computing model leaves room for partners.

“Partners can open new doors, provide more complete services to customers, customize and enhance applications, and create recurring revenue streams,” company statements said.

Microsoft continues to move aggressively considering that it just began to move to the cloud computing model approximately five years ago, with a growing focus over the past two or three years.

Last spring, company officials said that, counting all of its various online offerings, including both the company’s Dynamics CRM and ERP products and its Business Productivity Online Suite (BPOS), they had signed up more than 40 million paying cloud computing customers.

Microsoft officials said earlier this month that Microsoft would soon update its BPOS — which features cloud-based versions of Exchange, SharePoint, and Lync — to the latest 2010 versions, including the Office Web Apps, and would begin a preview before the year is out.

That’s essentially what Microsoft did Tuesday.

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