What is different about this version of Office 2010 is that it's fully subscription-based. The installer obtains a product key from the Office 365 servers automatically, which presumably will be revoked if you ever let your subscription lapse. That makes installation a one-click, hands-free procedure, but we still question whether the subscription model represents real value for this category of desktop software. The supporting Web services will make or break this kind of offering.
Office 365 users have immediate access to email, calendar, contacts, and chat via Outlook Web Access, and access to SharePoint sites via Web browser. For rich client access, they can download and install the Microsoft Online Services Connector, Lync client, and Office 2010 Professional Plus suite directly from the portal home page (above). The admin main page (below) is the first stop for managing Exchange Online, SharePoint Online, Lync Online, and their users.
Office 365: SharePoint in the cloudUnfortunately, the Web-based components of Office 365 are a mixed bag. Easy online collaboration via SharePoint Online is one of the more compelling features of the suite, but these features still feel half-baked. Users can simultaneously edit cloud-hosted documents created with Word and PowerPoint (but not Excel), yet changes made by other users show up only when you save your own version of the document, which feels more like traffic management than true collaboration. Alternatively, a user can "check out" a document, which blocks other users from editing it until it's checked back in.
Unlike Office Web Apps, which are reasonably browser-agnostic, Office 365 delivers various components as ActiveX controls, and it's not always easy to predict when and where those controls will be needed. If your browser doesn't support ActiveX, certain features will simply be grayed out, and it can be hard to tell whether that's due to a permissions problem, an as-yet-unimplemented feature, or because you need to try again using Internet Explorer.
Moreover, working from Microsoft's servers felt sluggish compared to a LAN, even over a fast Internet connection. Attempts to create, save, and update files were occasionally met with frustrating delays, making us long for a more traditional file server. Hopefully server performance will improve as the product leaves beta, but in general the Office applications don't feel as robust running on a Web-hosted workspace as on a local one.