Microsoft Office 365, a suite of business-focused, cloud-based applications that was recently released in beta, is actually a repackaging and updating of various Microsoft offerings -- optimized for the cloud. The intent is to give small businesses the kind of benefits that up until now only large companies have been able to get from services such as Exchange and SharePoint.
Don't be confused by the product's name -- it's not a new or updated version of Microsoft Office. Office 365 is an upgrade of Microsoft's Business Productivity Online Standard Suite (BPOS). This revamped and renamed version of the suite adds subscription-based access to Office 2010 to BPOS and includes hosted versions of Exchange, SharePoint and Lync (Microsoft's communications server), along with Office Web Apps, the Web-based version of Microsoft Office.
Some versions of Office 365 do include a subscription-based version of Microsoft Office Professional, and there are some links between Office 365 and Microsoft Office: You can use your local version of Microsoft Office to pull down and edit documents from the cloud, or use Office Web Apps to create and edit documents.
Apart from that, though, there are no connections, and you don't need Microsoft Office in order to use Office 365. It's one more example of confusing branding and naming from Microsoft.
From what I've seen in the beta, Office 365 offers an excellent set of tools for companies that want the power of Exchange, SharePoint and Lync but don't want to host them. It will be especially welcomed by small and midsize businesses that can't afford data centers and sizable IT staffs.
But the product, at least in its current form, has enough rough edges that it feels more like a series of applications bolted together than a well-thought-out, integrated whole.
Pricing for Office 365 is tiered. Small businesses with up to 25 users pay $6 per user per month, which doesn't include Microsoft Office. (The suite works with already-installed versions of Office.) For larger enterprise customers, there's a wide range of pricing. For example, existing BPOS customers pay $10 per user per month (the same price they pay today), while enterprises that want a subscription-based version of Microsoft Office Professional Plus for their users, in addition to the rest of the suite, pay $24 per user per month.
Exchange and Outlook in the cloud
When you first log in (Office 365 supports Internet Explorer and Firefox, but not Chrome), you're greeted by a simple, straightforward page that lets you navigate to the Web-based version of Outlook for reading e-mail, head to SharePoint to use its services, install or use the Lync communications server, install connector software that links your local Outlook client to Office 365, or install Microsoft Office Professional if it's not already installed.
The heart of the suite, and the feature that can provide the greatest benefit for small and midsize businesses, is Exchange hosted in the cloud. This offers the benefits of Exchange without the headaches of hosting.
The biggest advantage is getting access to corporate e-mail via client-based Outlook, Outlook on the Web, and on most popular mobile devices, including Windows Phone 7 devices, Android devices, BlackBerries and Apple's iPhone.
For mobile devices, Office 365 provides true Exchange support, not merely POP3 access -- the e-mail storage is in a central location, and you're merely accessing that same storage from different devices. For example, if you create and send e-mail on your Android phone, it will show up in your e-mail outbox on client-based Outlook, Outlook on the Web, or any other device that accesses your mail.
More important, when you take any action on your e-mail on any device, that action automatically flows to any other devices accessing e-mail. Create a new folder on Web-based Outlook, for example, and it shows up in the client version of Outlook.
The Web-based version of Outlook looks much like the client version; there's no learning curve because the interface mimics the familiar client look quite well. As with the rest of the suite, it's supported on Firefox and Internet Explorer, but not Chrome. It will be familiar to those who have used Outlook Web Access (OWA). You get access to your calendar as well as e-mail.
Setup and use on mobile devices is generally straightforward, as long as you watch out for a few potential glitches. It should be no surprise that setup with Windows Phone 7 devices is the simplest. Just enter your password and username, and Windows Phone 7 does the rest. You'll then be able to use your mail via Windows Phone 7's Outlook app. However, you may not see older e-mails that have been sent and received. That's because the default setting for Outlook on Windows Phone 7 only syncs mail that has been sent and received in the last three days.
You can change that setting to the last seven days, the last two weeks or the last month, or you can set it up so you can view mail sent and received at any time. In Outlook on Windows Phone 7, get to the settings screen, then select "Sync settings-->Download e-mail from" and make your choice about how you want mail synced.
Setting it up on other phones generally takes a little more work. In Android, for example, you have to go into My Accounts and set up a new Corporate Sync Account. For the Domain/username field, you have to append the address of your Office 365 account to the front of your username. For example, if your Office 365 account is mydomain.onmicrosoft.com, and your username is pgralla, you'd enter mydomain.onmicrosoft.com/pgralla in that field. For the Server field, you enter m.outlook.com. Once you do that, it works and syncs as you would expect.
Administrative e-mail tools
Even though Exchange 365 is hosted in the cloud, rather than on your company's server, you still get a full suite of administrative tools. You can easily add new Outlook users, either singly or in bulk (via .CSV files), determine whether users get administrative rights, and so on.
There are also tools for migrating in-boxes from a company's server-based version of Exchange to the Office 365 cloud-based version. These tools won't work for people who have been using Outlook in concert with POP3-based mail, though. There is a migration tool for IMAP accounts, although that requires a bit of extra work.
You'll also find a variety of more sophisticated tools as well -- for example, you can set group permissions for performing tasks such as allowing people to search across multiple mailboxes. In short, you get the kind of administrative tools you expect with Exchange, even though you don't host Exchange yourself.
Unfortunately, this is also one of many examples of the poor overall integration in the Office 365 beta. When you're on the pages for managing Exchange, there's no navigation to any other part of Office 365 -- essentially you're in a silo that appears to be a dead end. You have to navigate back to Outlook, and from there use site-wide navigation. This is a problem that appears time and again throughout the suite.
Office 365 also offers a hosted version of SharePoint, which allows you to build team sites where everyone in your organization can collaborate on documents and share a common document library.
Creating and designing a new team site is surprisingly easy. You choose a design, theme color and so on, and then add elements such as images, tables and document libraries. Adding documents to a team site is exceptionally easy: Click an Add Document button, choose the file you want to upload, and your work is done.
Office 365 gives you a great deal of control over your team sites, far more than most organizations will ever use. You can, for example, set up groups with specific permissions, and then assign people to those groups. You can customize document permissions to an extremely fine degree -- for example, giving some people read-only access, others full control, others only the ability to contribute but not make edits, and so on. You control who can access the site and who can't.
In short, you get all the usual SharePoint tools, including the ability to share documents with those outside your organization. Team sites also include version control functionality, so documents can be checked into and out of libraries, to ensure that people can't overwrite one another's work.
Office Web Apps
Microsoft has forged links between Microsoft Office and team sites in Office 365. When you click on a document in a team site, you can open and edit it in Office, and then save it back to the team site. In addition, if you use Microsoft Office Professional Plus, which includes Microsoft SharePoint Workspace 2010, you can get access to team sites and their document libraries when you're offline by syncing to them when you're online, using them offline, and then resyncing when you're back online again. And you can also publish Access databases to SharePoint Online and allow people to get access to those databases from a Web browser.
According to Microsoft, you should be able to use Office Web Apps for reading, editing and creating documents on team sites, and you should be able to allow several people to work collaboratively on the same document simultaneously. I was unable to get that to work on my test machines. However, this may have been an anomaly on my part.
Office 365's flawed integration is especially evident in SharePoint. Once you enter SharePoint, you frequently lose navigation to the rest of Office 365 -- you appear to be in SharePoint alone. Even navigating to different parts of SharePoint itself is confusing, because you'll often have to use your browser's back button rather than SharePoint-specific navigation.
Web sites -- the weak link
Office 365 includes tools for building Web sites, and this is very clearly the weak link in the chain.
If you use Office 365 for e-mail, SharePoint and other services, you also have to use Office 365's built-in tools for building and managing your Web site. Why? Because when you port your domain over to Office 365, Microsoft hosts both your Web site and your e-mail. Office 365 doesn't include a feature that simply lets you post your own HTML and Web-based applications to a Web server.
So if you've built a Web site with other tools, have a Web development team, or have hired an outside firm to build a site for you, you're out of luck -- you can't build your own site and then have it hosted on Office 365. Microsoft says that you may eventually be able to use a work-around in which only your mail is hosted on Office 365 and your Web site can remain elsewhere, but there are no details yet.
The site-building tools are simplistic and template-driven, so your site will end up looking generic, with only images and text to distinguish it. There are the usual "About Us," "Contact Us," "Site Map" and "Member Login" navigation links, several preset "zones" where you can place content and so on. You can choose from a variety of different themes that will populate the site with graphics, and there are plenty of these, ranging from accounting to lawn and garden -- but since this is a beta, many of the themes are missing. You can also choose from a number of basic layouts such as one-column, two-column, three-column and so on. And you can define your own custom style sheets and change the background.
On the upside, changing the text is as simple as typing, and publishing is as simple as pressing a button after you've made all your changes. You can also easily preview everything before you publish.
So if you don't yet have a Web site and are looking to get one up and running with the minimum fuss, you may be satisfied, if a generic-looking site is all you need. But those who want something more sophisticated than a fill-in-the-blanks approach will not be pleased.
Microsoft would do well to give people the option to design and post their own sites using their own tools, and allow Office 365 to function as a traditional hosting service, not one that forces you to use predesigned templates.
Office 365 also includes Lync, Microsoft's service for setting up online meetings, detecting the presence of other employees in an organization and communicating via instant messaging. It's a hosted, updated version of what was previously called Microsoft Communications Server. Especially useful is the ability to view "presence" information for authors of documents hosted on a team site, so that you can see when they are online and available for a chat or online meeting.