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Microsoft Rolls Out New Office 365 Products for Midsize and Small Businesses

Microsoft has finalized its Office 365-branded new product offerings today by announcing three additional ways to buy the productivity suite.

The three new offerings, available today from Microsoft or its partners, include Office 365 ProPlus, Office 365 Midsize Business and Office 365 Small Business Premium. Office 365 ProPlus is essentially the productivity suite part. It consists of Access, Excel, InfoPath, OneNote, Outlook, PowerPoint, Publisher and Word. The other two offerings are product bundles with added capabilities and applications, as designed for organizations with 10 to 250 employees (Midsize Business) or one to 10 employees (Small Business Premium).

On top of the productivity suite news, Microsoft announced today that it has updated other Office 365 services, including Exchange Online, Lync Online and SharePoint Online. The SharePoint Online update includes some Yammer enterprise social networking additions. Microsoft is promising that its Lync Online service will add connectivity with the Skype voice-over-IP service in June. The new updated Office 365 services are "available today in 69 markets and 17 languages," according to Microsoft's announcement. An expansion to 20 more markets and 16 more languages is expected to happen in the second quarter.

New Office 365 Products
Organizations can purchase Office 365 ProPlus by itself for $144 per user per year. It comes with the rights to use Office applications on up to five devices. Office 365 subscribers can use Office for Mac 2011 if they wish -- either instead of, or in addition to, the Windows version. Office 365 ProPlus is also available bundled with Office 365 Midsize Business and Office 365 Enterprise.

The Office 365 Enterprise product wasn't announced today because it has been available previously. Some of the new Office products have been available for purchase since December, but today's announcement represents perhaps the last of this year's new product offerings based on Office 2013 and the new Office 365 technologies. In March, Microsoft's partner community will begin selling Office 365 Midsize Business and Office 365 Small Business Premium under Open volume licensing, which is new and something that Microsoft promised to roll out at its last Worldwide Partner Conference.

The Office 365 Midsize Business bundle includes Office 365 ProPlus, along with Exchange Online, Lync Online and SharePoint Online services. It provides Active Directory integration, a Web console for management and includes phone support. It's priced at $180 per user per year.

The Office 365 Small Business Premium bundle includes Access, Excel, Lync, Outlook, OneNote, PowerPoint, Publisher and Word. It comes with 25 GB mailboxes for users and the ability to share calendars, as well as videoconferencing. Microsoft is claiming that this offering doesn't require IT expertise to manage the software. It's offered at $150 per user per year.

Subscription vs. Perpetual License
The new Office products, and Microsoft's announcements, have been somewhat confusing because Microsoft has announced different products at different times (see sidebar). The branding is different, too -- either Office 365 or Office 2013. There are traditional perpetual licenses with Office 2013 products, including boxed retail copies and volume licensing models, in which the rights to use the software never expire. Then there are the Office 365-branded new Office products, which only permit use of the software for as long as the organization or user continues to pay for the license. It's possible to edit the files after the Office 365 subscription ends if the user has access to a comparable Microsoft Office product. Otherwise, the files that are created with an Office 365 subscription become read-only after the subscription ends.

Office 365 and Office 2013 Release Timeline

Microsoft released the new Office products at various times during the first quarter of 2013, although volume license customers could purchase some Office 2013 products as early as December 2012, such as Office 365 Home Premium, Office 365 Small Business Premium, Office 365 ProPlus and Office 365 Enterprise. Here's the release timeline for 2013.

January 29 General Availability
Office 365 Home Premium, Office Home and Student 2013, Office 365 University, Office Home and Business 2013, Office Professional 2013

February 27 General Availability
Office 365 Small Business, Office 365 Midsize Business

March 1 Open Volume Licensing
Office 365 Small Business Premium, Office 365 Midsize Business

Office 365 is actually Microsoft's branding for various Microsoft products that either run from the cloud or are supported from Microsoft's datacenters. In addition to the Office 365 ProPlus productivity suite offering, the main products from Office 365 include Exchange Online, Lync Online and SharePoint Online. Organizations can buy Microsoft's product bundles or buy Office 365 services separately. Microsoft describes Office 365 as being cloud based, but the actual Office applications always get installed on a local machine or server. They don't run from Microsoft's cloud, but are typically enabled by Microsoft's cloud-based services.

The main advantage of using the Office 365 subscription-based service over the traditional perpetual license model is that Microsoft promises more frequent software updates, which will be happening on a quarterly basis going forward, Microsoft has announced. These Office 365 updates can include additional product features. In the past, not all Office 365 product offerings got these updates, but on February 27, all of the Office 365 offerings will follow that quarterly update model, according to Julia White, general manager and head of product management at the Microsoft Office Division, in a Tuesday phone interview.

Feature updates might be possible to get, too, if Microsoft issues a free service pack for Office 2013 perpetual license products. However, the release of those service packs isn't assured.

Office 365 subscription-based offerings also differ from perpetual licenses in that they are per-user licenses, allowing a single user to install Office on multiple devices. The perpetual license model is a per-device licensing model. Under that model, Office can be installed on just one device per user, especially when the organization doesn't have Software Assurance coverage.

Some companies may prefer paying by subscription with Office 365 to spread out their costs. The Office 365 terms can vary, based on whether the subscription is based on month-to-month payments, annual payments or three-year terms, according to the "Microsoft Online Services Licensing Guide," available here.

Cloud Perks
Office 365 productivity suite offerings aren't run from the cloud. However, depending on the bundle selected, they are cloud supported. One example is "Office on Demand," which allows users with a Microsoft account to temporarily install Office bits on a machine, even if the machine isn't covered by Microsoft's licensing. After the Office session ends, most of the bits get wiped automatically from the machine. Office on Demand is based on Microsoft's App-V application virtualization technology.

It takes two to three minutes, rather than 40 minutes, to install Office using Office on Demand, according to White. She added that users can run Office side by side with other Office apps using this technology. "Starting tomorrow [February 27], an organization with 1,000 employees can deploy Office ProPlus side by side with any other Office version," she claimed.

Other bundled features in the Office 365 offerings can be based on Lync Online, such as videoconferencing. Alternatively, Office 365 offerings may tap into SharePoint Online. For instance, Office Web Apps, which are Microsoft's limited Office apps that run in a Web browser, rely on the use of the Office Web Apps Server, which is based on SharePoint. Office Web Apps use will be added to all of the Office 365 plans on February 27, according to White.

Another SharePoint Online-based Office 365 solution is SkyDrive Pro, which provides commercial-grade cloud-based storage space. SkyDrive Pro is available with all of the enterprise, midmarket and small business offerings, White said. She added that SkyDrive Pro provides organizational controls for IT pros, including versioning and e-discovery. It allows document sharing that is synchronized to Active Directory, and it provides all of the enterprise auditing controls, along with user simplicity.

White said that Microsoft is seeing momentum with its Office 365 offerings. Microsoft has doubled its Office 365 install base over last 12 months. She said that one in five enterprises now use Office 365 services -- a number that is up from one in seven enterprises. New customers added include the Hamburg Port Authority, Midroc Europe and Sephora USA.

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