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Microsoft Office 365 sizes don't fit all

Many IT shops continue to bypass Microsoft Office 365 in favor of other vendors, citing a lack of optimized tools and customization capabilities.

Microsoft Office 365 has grabbed the attention of many IT shops over the past year, thanks to the company's marketing machine. However, once these shops examine the nuts and bolts of implementing the product, many realize that while Exchange in the cloud seems like a good idea, Microsoft may not be the best company to support them.

There are various flavors of Office 365, but none allow for customization or integration with tools and applications that are tightly coupled with their existing on-premises Exchange deployment. Furthermore, many companies are not thrilled with the prospect of incorporating Microsoft's most recent products whenever they become available, as it causes compatibility and training problems.

"People with on-premises Exchange can tell us when they want to upgrade, or what features they prefer. But with Office 365 it's the opposite," said Michael Tweddle, senior director of product management at Quest Software. "Microsoft tells users when they are going to receive a new set of features and when [those features] are going to get turned on. There are more restrictions to deal with."

Hard and fast customization and integration rules have frustrated customers who have relied on important tools for so long. The limitations cause many to turn toward other providers who can help companies get their Exchange email in the cloud and support their custom deployments.

"Once we walk them through the issues they will have to confront with Office 365, about eight out of 10 users end up going with our private cloud offering built around Exchange, instead of turning to Microsoft and Office 365," said Scott Gode, vice president of product management and marketing at Azaleos Corp., a private cloud provider and Microsoft partner based in Seattle.

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Many vendors offer an additional line of productivity and management tools for companies that run Exchange in the cloud, which is not yet available or optimized to work with Office 365.

"Our users leverage Quest products to manage on-premises Exchange for auditing, security, recovery and reporting for generating stats about usage in their environment," Tweddle said. "Those Quest products don't have the same functionality with Office 365, mainly because Microsoft is not there yet in terms of enabling APIs [application programming interfaces] for us to manage Office 365 in the same way."

At the present time, Microsoft is primarily concerned with keeping Office 365 up and running, with less emphasis on supporting every company's nuanced deployment. Microsoft has not allowed other companies to support or host Office 365, for fear they may tinker with its configuration, potentially leaving it vulnerable to downtime.

"It's not that Microsoft feels it needs to control [Office 365] from a Big Brother standpoint. It is just focused on providing a consistent experience and making sure the code is right. They have made the decision to keep it in-house," Gode said.

What about all those Office 365 wins?

Despite many companies opting for hosted Exchange, Exchange as a Service, or otherwise delaying Office 365 purchasing decisions, Microsoft continues to crow about Office 365 success. The company has boasted how many IT organizations -- both small and large -- are building strategies around it.

But it's the small- and medium-sized businesses that have had the most success with the product. These are primarily companies with small or no IT staff. Microsoft has helped them manage things such as Active Directory, firewalls and patching.

While some observers note Microsoft has indeed registered wins among larger companies, few have actually deployed Office 365 into production environments. They said Microsoft has applied increased pressure on its sales force to ramp up the number of Office 365 seats. The company's sales force has accomplished this in many cases, in part, by offering those seats at a significant discount as part of customer's existing Enterprise Agreements.

"It goes back to their sales model where people are being told they have to get a certain number of seats sold. So they are not selling the real value of the product and the whole thing starts to fall apart after two or three years. It has been close to three years since they started selling Office 365, so those original EAs [enterprise architectures] are rolling back around for renewal," according to an ex-Microsoft executive familiar with the strategy.

The next update for Office 365, due early 2013 via the Wave 15 drop (Exchange 2013, Lync 2013, SharePoint 2013, etc.), could entice more Exchange organizations to make the switch. By incorporating these new versions, Office 365 users should experience improved archiving capabilities, better data leakage prevention, enhanced e-discovery and Microsoft’s FAST search technology.

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In my experience selling and implementing Office 365 to organizations of all sizes including enterprises with over 1,500 seats, very few customers need the ability to tie in to the back end of Exchange. It's much more likely that they'll want SharePoint's advanced features for Business Intelligence or the like.

In addition, customers will have plenty of notice of changes to the service unlike competitor Google that recently announced a major change to their support for exporting older Office document formats only 4 days prior to their intended change date.

It appears that the major changes to products in the Office 365 suite will come at about the same pace that most companies are already updating their systems... every two to four years. With proper planning they can be very successful with the latest versions of the product suite. There is extensive testing before these products are placed in to Microsoft's production cloud offering.

That said, the benefits of running the most recent productivity software should far outweigh any downside. Many customers struggle with upgrades and the cost to perform those upgrades (new hardware and software) is a significant capital expenditure. The prospect of costly upgrades becoming an operational expenditure and "automatic" is very appealing to many organizations.

I agree that Microsoft has plenty of room to grow in the enterprise space. Companies with Enterprise Agreements (not architectures) tend to be larger customers that move more slowly. There are significant incentives for customers with over 250 seats to now move to Office 365 and with the product refresh approaching rapidly next March/April there will be even more reasons for customers to consider the software + services options in Office 365.

Scott Cameron
Cloud Practice Lead
Valorem Consulting Group