Microsoft launches Office 365

Microsoft on Tuesday unveiled Office 365, a package of hosted services that include Office Web Apps, Exchange Online, SharePoint Online and Lync Online. Scheduled to ship next year, Office 365 is now available in limited beta form in 13 countries and regions worldwide.

When it does ship, Office 365 will be available to companies with fewer than 25 employees for $6 per user per month. For larger organizations, Microsoft will offer a variety of services, from bare-bones e-mail for as little as $2 per user per month to more full-featured accounts, such as the one that includes Office Professional Plus, along with the other suite components, for $24 per user per month.

Office 365 is the latest version of the Microsoft Business Productivity Online Standard Suite (BPOS), which includes the hosted versions of Exchange 2007, SharePoint 2007 and Office Communications Online but not Office Web Apps. The hosted versions of Exchange and SharePoint in Office 365 will be based on the 2010 editions of that software, while Lync is the next version of Office Communications Server, and Lync’s online version is an upgrade to Office Communications Online.

Mac users will be able to use it, assuming they’re using OS X 10.4 or later. The online suite will be compatible with Office 2008 for Mac; Microsoft says it’s “exploring making Office for Mac 2011 available as part of the options that customers have with Office 365.” Office 365 will also be available via a variety of mobile devices, including iPhones, Android, BlackBerry and Windows Phone.

The primary target for Office 365 appears to Google Apps and other communications and productivity suites for businesses that have in recent years put significant competitive pressure on Microsoft.

“Is this the death of Google Apps? Not right away, particularly if [this] ends up looking just like Office with a longer cord,” said Rebecca Wettemann, a Nucleus Research analyst, via e-mail. “But this announcement alone will threaten and lengthen every Google Apps deal in the pipeline.”

However, Microsoft has work to do to deliver on the vision it has outlined for Office 365, she said. “Customers will be expecting rapid response times regardless of their Internet connection, a way to collaborate within applications, and features like version control, not just traditional Office over an Internet connection,” Wettemann said. “Reliability in the cloud is key, and Microsoft hasn’t traditionally been known for reliability on the desktop.”

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