Office 365 and the New Utility

The last time I wrote about this topic back in December, I said that you were probably sick of hearing about how cloud computing was going to revolutionise IT, which means I should probably apologise for now saying this – cloud computing is going to revolutionise IT. Or rather, some providers of cloud computing are going to revolutionise IT. I also provided a more detailed paper in my last blog, entitled, ‘The Cloud; Cutting through the hype’, which talked about Gartner’s notorious Hype Cycle, and how we were, at that time, at the inflated peak of the hype curve – everybody wanted to be part of the cloud, whatever exactly that was, because there was quite a lot of misuse of the term.

Over the last 6 months, we have started to slide down the hype curve, into what Garter calls the “trough of disillusionment”, with too many small local vendors, developing poor quality, ‘cloud’ computing systems, which are relatively expensive and limited in terms of functionality. At the end of June however, we saw what I believe will be the first signs of the upward “slope of enlightenment”, when Microsoft officially launched the long-awaited Office 365, bringing together the Cloud versions of the most well-known Microsoft Products, including Exchange, Lync and SharePoint, along with the latest version of Microsoft Office.

Compared to the recent efforts of local providers to supply ‘cloud’ services, this new offering from Microsoft is cheaper, (both to set up and on an on-going basis), more flexible, has more features, and offers products that have been custom-built for the cloud environment. With several other IT powerhouses, such as Google, Oracle and Amazon also pumping billions into developing cloud services, the day of reckoning has now well and truly arrived.

Specifically, Office 365 now provides access to enterprise level technology for as little as £6.50 per user, per month. Compare this to ‘cloud hosted desktops’, remote services using off-the-shelf Microsoft Office that providers in the Channel Islands have been offering for £100 per month, and it is clear that some vendors are not going to survive this new era of cloud development.

With Office 365 there is no capital investment required to buy infrastructure, like servers, or the need to factor in the cost of support, such as additional staff or power. And the ability to add or remove users instantly, also means you only pay for what you are actually using, making Office 365 suitable for large and small businesses alike.

While there has been some debate about how cloud computing will work legally in terms of client data jurisdiction, (for example for local Trust companies), we are now finding at C5 Alliance that for many clients, many elements of Office 365 are still incredibly useful and cost effective, and hybrid solutions that still isolate client data locally can easily be put in place. I believe that as products like Office 365 develop, hybrid solutions will become more common, and the meaningful question businesses will ask themselves is not, “should we use the cloud?”, (the answer will be “yes”), but more importantly, “do we keep our client data in-house on our own server, or outsource to a locally based storage provider?”

Effectively, as I discussed in my last paper, the developments being brought forward by the big players, like Microsoft, are going to make computing the New Utility. Until now, our IT provision has been the equivalent of having individual electricity generators in each building, and everyone owning private water tanks. In the future, we will pay for our computing in the same way we pay our utility bills, and cloud services will legitimately be able to claim their spot on the Monopoly board.

Tags: Cloud, Microsoft, Office 365