Simpler Branding May Drive Higher Levels of User Adoption for Microsoft’s Office 365 Business Productivity Cloud SaaS

For most business users, Microsoft’s Office suite is a familiar set of computer tools. But some of this familiarity is associated with a hybrid “feature rich” and “hard to use” brand. Simplifying this branding, by turning down the “hard to use” component may help Microsoft’s efforts to persuade more of its business customers to migrate to its Office 365 cloud, SaaS offer.

Tom Petrocelli touches on some of this problem in an article posted to CMS Wire on August 7, 2014. In The Barriers to Working like a Network in Office 365. Petrocelli focuses, specifically, on the collaboration features of Office 365, which makes sense given his reference to “work like a network”, which is a concept Jared Spataro (Microsoft’s General Manager of Enterprise Social) presented in a post to the Office Blog back on March 3, 2014.

This writer has first hand experience with the Office 365 conundrum resulting from a combination of “two many features” and “too many ways to get it down”. It took weeks for him to figure out OneDrive for Business, and how it interacts with SharePoint Online (another component of the Office 365 suite).

The aversion instilled from this confusion was further exacerbated by what he could only assume to be a poorly coordinated offer, by Microsoft, for its Office 365 business customers: each subscriber to Office 365 for business would receive 1 TB of cloud storage for its OneDrive for Business service, but only 25 GBs of storage for SharePoint Online. This made little sense as, on the surface (no pun intended), SharePoint Online appears to have all of the components required to provide business consumers with a fast and accurate method of finding just the content they need, should they opt to use enterprise search. In contrast, OneDrive for Business did not appear to have the same capabilities. The fog only cleared when he discovered OneDrive for Business is actually a SharePoint Online Document Library, with some added features.

Petrocelli’s article, and the personal example, above, both talk about too many ways to get things done when business consumers need to collaborate. But this post purports to talk about too many components of a product branding message. Where’s the connection? The connection can be found in the market messaging Microsoft is presently creating and articulating around its efforts in the enterprise search market. In this writer’s opinion, there are too many components to this message, which, ultimately will likely only confuse business consumers.

If Microsoft can renovate its product branding strategy around some simpler themes, the process of persuading business consumers to migrate to Office 365 can only get easier. The related costs may be less, as well, helping the profitability of the product.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


Are Business Tech Consumers Likely to Adopt Cloud Computing for High Use, High Value Applications?

Analysts following cloud computing may want to include a “usefulness” factor into their assessment of how users are adopting these new computing trends. Early examples of how high value applications perform, when clients are located remotely from terminals and screens may not be as promising as one would otherwise expect.

We maintain an Office 365, Enterprise Edition subscription. Once we learned of the “1 TB of OneDrive storage coming to an Office 365 near you” offer from Microsoft, which provides any/all subscribers to Office 365 1 TB of storage, at no additional charge, we decided to back off of using an on premises Linux storage repository and move all of the active, daily storage we need to this OneDrive for Business cloud offer.

Unfortunately, when users are consuming office productivity applications like Word, Excel, or PowerPoint from the Office Professional Plus suite included with an Office 365 enterprise plan, the bi-directional communication required between desktop, remote client, and remote storage can (and in our case does) create a rather unsatisfactory daily computing experience which average users may not be willing to adopt.

Despite maintaining a high-speed fiber optic data connection with the WAN, we are experiencing 10-30 sec latency, literally 100s of times a day, as we create or edit documents which are stored in our OneDrive for Business repository. When the applications subject to this experience were limited to email and browsing web pages, this time drain didn’t amount to much and, therefore, was tolerable for our users. But when high value applications take on the same characteristics, it may not be easy for the “average” business technology consumer to accommodate the experience.

It would seem the same type of procedure is required of businesses using Google Apps for business, especially where the desktop hardware are Chromebooks. This writer thinks resellers like BestBuy opted to “pre-warn” consumers about the unique “flavor” of cloud-intensive computing as the results of a heavy rate of product returns from dissatisfied consumers (caveat: we have no hard statistics on this point, but still note introductory material designed to help consumers “learn more about Chromebooks” before they actually purchase one on BestBuy’s web site).

Bottom line: over time we think a substantial segment of consumers will be reluctant to adopt pure cloud computing for high value applications.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


Office 365 Subscription Plans Evolve Into a Promising Revenue Opportunity for Microsoft

During Microsoft’s most recent quarterly earnings conference call numerous references were made by Amy Hood, CFO, and, I believe, Satya Nadella, CEO to Microsoft’s Cloud business proceeding at an annual run rate of $4.4 Billion USDs. This is a substantial number. Facebook’s annual run rate, per their latest 10Q as filed with the US SEC is approximately $12 Billion USDs. Google’s entire “Other” product revenue segment produced $1.6 Billion USDs for the latest quarter, only 9% more than the run rate Microsoft is claiming for its cloud offers (mostly Azure and Office 365).

The rate at which Office 365, specifically, is developing into a promising revenue opportunity for Microsoft should not be underestimated. We have first hand experience with the cost realities. We maintain an Office 365 E3 plan and a Dynamics CRM Professional plan. These combined plans are costing us $90 USDs per month. Assuming we are simply one of literally hundreds of thousands of SMB customers, one can quickly get a grasp as to how large the potential market is for Microsoft for this offering.

But it gets better. One of the most highly promoted features of Office 365, and the basis for a lot of the editorial content enfusing Satya Nadella’s recent presentations, has to do with Business Intelligence (BI) and Analytics. We purchased an Office 365 E3 plan in order to leverage some of these features, for example, SQL Server Reporting Services for SharePoint, and Excel Services for SharePoint. But Power BI, which includes Power Map, Power Q&A, etc, is now an extra cost add on service, which we will need to pay for. At a listed cost of $40 per user per month, we are looking at an almost 50% increase in our monthly subscription cost to add the service.

Are the benefits worth the expense? The answer will, of course, vary from customer to customer. But, for any SMB in a regulated industry, or any SMB doing business with larger companies with an appetite for BI reports, the answer will likely be yes.

Microsoft’s principal competitor for this type of service is IBM. To the best of our knowledge, Google has nothing close.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


Microsoft Acquires InMage and Adds Another Dimension to Its Hybrid Cloud Storage Offer

Microsoft publicly announced its purchase of InMage on July 11, 2014. With this purchase Microsoft adds another solution to its growing list of answers for enterprise businesses migrating to a hybrid computing architecture built with on premises and cloud IaaS, SaaS components. The other product in this lineup is the StorSimple Hybrid cloud storage offer, which partners hardware from Seagate with custom software to provide a backup method for data reposed on Azure.

Why the need for these solutions? As this writer discovered recently, business subscribers to Microsoft’s Office 365, with data residing in business silos (with, in turn, their own databases) may have a very difficult time retracting this information, once it is uploaded to the cloud. If the information resides in Access 2013, for example, once the data is sent to the Office 365 cloud as an Access 2013 App, it will be converted to SQL Server data, regardless of whether or not the customer maintains a license for SQL Server or not. The Access 2013 App simply lands “somewhere in Azure” and cannot be retrieved.

For larger businesses, this kind of experience is untenable (and for understandable reasons). Given the urgency of Microsoft’s objective to emerge as the premier provider of solutions to a “mobile first, cloud first” market, proceeding without a solution directly assuaging market concerns about the data integrity of a hybrid computing architecture with on premise and cloud venues, disaster recovery, and simply periodic backup of the whole thing to on premise servers and storage is an unacceptable option. Evidently Redmond has gotten a lot of the message on just what can be expected of enterprise business on the question of cloud computing migrations.

As Takeshi Numoto states in his blog post announcement of the InMage acquisition, the “business continuity” solution represented by the InMage product running on Azure actually expands the attractiveness of Azure as a premier cloud, IaaS option not only for enterprise customers standardized on Windows, but also for their counterparts running Linux or even VMware. So InMage expands the reach of Azure, while, at the same time, providing a unique feature neither Google Compute, nor Amazon AWS can offer, at least for the near future.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


Android’s New Enterprise Features Aren’t Likely to Overtake Microsoft Office Anytime Soon

Sundar Pichai presented the latest innovations from Android targeted to enterprise IT and business consumers during this year’s I/O Developer conference. Samsung’s Knox is one of the two anchor tenants of this latest tech strip mall, with Quickoffice (ostensibly a seamless way for users to “natively” edit Office documents without a file conversion) providing the big box store magnetism.

The big neon sign pointing drivers to this new shopping paradise was Pichai’s big claim of much higher levels of Android penetration of enterprise business markets–58% of the Fortune 500. The shock value of this statistic is, of course, diluted by what Pichai did Not report, meaning he did not answer the following question: “Is this penetration contributing to these same enterprise consumers deciding to drop other methods of processing computing tasks?”

While we don’t know the right answer to this question, the likely choice would be “no”. Technology consumers from enterprise business and comparably sized organizations in the public and not-for-profit sectors are notorious for having an interest in consuming several different solutions for the same problem, albeit at different levels of intensity. Sure, 58% of the Fortune 500 uses Google Docs, Drive, etc. But they are also using Box, DropBox, SAP, Oracle, and everything else out there with any kind of pervasive market credibility as a solution worth having.

Missing from the above list, of course, is Microsoft® Office. This writer omitted including Office in the list for one big reason. It is highly likely that 100% of the Fortune 500 uses this one solution, and with much greater frequency than any of the others.

So, with all due respect to Android, 58% is “chump change”. When we factor in the unique features of Office 365, which is reputed to be Microsoft’s fastest selling product of all time, the significance of Android’s latest moves diminish further. There is simply nothing comparable to SharePoint, and SharePoint Online in the Google set of enterprise applications. Any highly regulated business can still save a bundle by customizing SharePoint components into a satisfactory records management, or enterprise document management solution, complete with analytics.

Should Google opt to offer something directly competitive to SharePoint (this writer sees little incentive for them to do so) the situation may stay, as is, for quite some time to come.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


Is Collaboration the Irresistable Lure ISVs Need to Motivate Enterprise Business to Embrace Cloud Computing Offers?

Microsoft® appears to be using its Yammer business to equip SharePoint Online, Office 365, with ‘cloud only’ features. Does this point to collaboration as a very hot topic for enterprise business? Or is this move simply another example of engineers building ‘a solution without a problem’?

On June 3, 2014, Christophe Fiessinger, a Group Product Manager on Microsoft’s enterprise social team published a post titled Yammer brings conversations to your OneDrive and SharePoint Online files. This post introduced a new product called “document conversations”, which will only be available to businesses subscribing to Microsoft’s Office 365 cloud SaaS offer.

“Document conversations” look like a method to add comments to a work in progress (a document, spreadsheet, presentation, etc). This capability is, of course, now ubiquitous, and a familiar feature of not only each of the components of Microsoft’s Office suite, but also other authoring products, for example, Adobe Acrobat Professional, or InDesign, or even each of the components of Google Apps. But ‘document conversations’ expands the range of options for teams to collaborate. The feature is built on a “Yammer pane”, which is juxtaposed next to the work space, and can be used to directly solicit opinions from team members, or to present questions about the topic of the document-creation project. This “Yammer pane” can also appear next to an image included in a document, or even some external content.

Is Microsoft onto something here? Are enterprise business CIOs losing sleep over concerns about the extent to which personnel are collaborating (or, perhaps it would be better to say NOT collaborating) on organization-wide tasks, or even departmental objectives?

I am not prepared to answer this question, but I can confirm the components of the debut of this feature, meaning a set of capabilities exclusively offered to cloud SaaS subscribers only, is likely to be repeated, going forward, as Microsoft (and its competitors) ramp up efforts to persuade enterprise business to hasten the pace at which they are adopting cloud, SaaS offers.

ISVs have a lot to gain should enterprise business speed up this process. As their product marketing objectives become clearer (and I think the ascendance of Satya Nadella to the role of CEO at Microsoft, along with the introduction of the now familiar ‘mobile first, cloud first’ mantra is a good example of one of these businesses gaining clarity on just where it wants to go on this topic), then enterprise business prospects will likely witness a lot more of these efforts.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


SharePoint Conference 2014: Microsoft Claims Sìxty Percent of Fortune 500 Companies Have an Office 365 Subscription

In his opening remarks during the Keynote presentation for SharePoint Conference 2014, Jared Spataro, General Manager at Microsoft®, claimed 60% of the Fortune 500 have signed up for corporate subscriptions to Office 365.

Perhaps this is a big number, and perhaps it is not. Many businesses will simply sign up for a new service from an important ISV like Microsoft, as a matter of course. But the extent to which they will actually deploy important corporate data to a cloud system like Office 365, is another question.

My conversations with contacts at the conference produced some interesting information, with regards to how enterprise IT organizations, in 2014, are apparently quantifying return on investment in a service like SharePoint. I think it’s safe to say the same type of numbers should apply to the SharePoint Online component of the Office 365 offer.

The number I heard amounted to a satisfactory return on investment of somewhere around 8 minutes per day, per SharePoint user/CAL. In my opinion this is a very low number, which reflects a substantially reduced expectation of just what a service like SharePoint/SharePoint Online can be expected to deliver to a large community of users.

So if 60% of the Fortune 500 are subscribing, already, to Office 365, and their average user makes use of the service approximately 8 minutes per day, I think it’s safe to say the service is just marginally significant for consumers at this point in time.

Two looming opportunities could deliver much higher levels of consumer engagement. Should Microsoft convince enterprise IT organizations of the security of Office 365 as a mission-critical remote repository for corporate data assets then, certainly, opinion would likely change and consumer engagement on the service would certainly increase.

At the same time, the current trend towards hybrid implementations for SharePoint on premises and SharePoint Online, if it takes on more of a defined shape, completely with a set of best practices, case studies, success stories, etc., will accomplish a lot of the same objectives.

So the true impact of the 60% percentage figure Spataro cited is up to the reader to determine. But it makes sense to stay tuned on this one as Microsoft and its consumers are working rapidly to increase the utility of the service.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved


Microsoft Offers Important Office 365 Growth Metrics at Its SharePoint Conference 2014

Jared Spataro, General Manager, opened the Microsoft®SharePoint® Conference, 2014 with news about Office 365, Microsoft’s cloud bundle offer of SharePoint, Lync, and Outlook: the business has grown by 500% and is now the fastest growing product in Microsoft’s history. Spataro also informed a massive audience awaiting the core of the keynote presentation (to be delivered by no less a luminary than President Bill Clinton) on sales performance for the product — Office 365 produced approximately $1.5 Billion for the company last year.

The core component of the Office 365 Software as a Service (SaaS) offer is SharePoint. Anyone interested in learning more about the year over year sales performance for SharePoint quickly got their answer. By achieving its position as the fastest growing product in Microsoft’s history, Office 365 had displaced SharePoint, itself, which had produced “double digit growth, consequently, for each of the last 18 quarters” (precis of comment made by Jared Spataro during his Keynote presentation at the Microsoft SharePoint Conference 2014).

So it doesn’t take a lot of math to put together an approximate picture of combined revenue into the company of some where well north of $2.7 Billion for a combination of on premise SharePoint sales and Office 365 subscriptions. My approximation is likely to be conservative as I’ve simply added $1.2 Billion to the approximate $1.5 Billion Spataro publicly presented (disclaimer: I have no verified statistics to support my approximation beyond the $1.5 Billion mentioned during the Keynote for this fiscal year).

The numbers didn’t stop here. Prior to Jared Spataro reaching the podium to kick off the Keynote, Microsoft presented a multi screen video show for the audience purely composed of some staggering statistics: SharePoint hosting, literally, hundreds of thousands of blogs, massive numbers of newsfeeds (combining statistics from its very popular Yammer with the core SharePoint newsfeed feature), and lots and lots of implementations of the product as an internal Intranet for business consumers.

The public relations timing of the opening of the SharePoint Conference, 2014, the announcement of Mark Hurd’s promotion to the position of Chief Strategy Officer for Microsoft (it’s worth noting Hurd served as the core pollster for President Bill Clinton, and, later, Secretary of State Hillary Rodham Clinton), and, finally, the interview with John Thompson, Chairman, on Bloomberg TV, is near perfect.

I can only conclude Microsoft is “smoking”, right now, and doesn’t look to cool off anytime soon.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved