Familiarity, improved features draw users to Office 365

update SINGAPORE--Customers see familiarity and improved features of Microsoft's Office 365 offering, which was launched Wednesday in six Asia-Pacific markets, as the main reasons for choosing it over other alternatives available currently.

Billy Cheng, head of management information systems at Kah Motor, the distribution agent for Honda cars in Singapore and Malaysia, said the company had been using Microsoft's Exchange and SharePoint services within its internal IT infrastructure so the features of Redmond's online productivity suite are already familiar to employees.

Additionally, the cloud offering is a bonus as a regular complaint of Kah Motor staff had been the lack of on-the-go access for the on-premise Office suite, he added. The executive was speaking to ZDNet Asia on the sidelines of a media briefing held in conjunction with the Office 365 launch in Singapore today.

Quizzed why the car distributor chose Office 365 over alternatives such as Google Apps, Cheng said that the company had given Google's productivity tool a month's trial but found it to be a "consumer-grade product". Tools such as Docs and Chat, he explained, are not as "advanced" and enterprise-friendly as Microsoft's Office and Lync communication offerings.

He pointed out that there is also a "learning curve" that needs to be overcome by the employees while the IT department will have to manage "another island of applications". Comparatively, Office 365 offers a "seamless integration" from the standpoints of both user experience and technology, he said.

In terms of functionality, Cheng lauded Office 365 as an improvement to its predecessor BPOS (Business Productivity Online Suite). For example, he said Microsoft executives admitted that the inflexible provisioning of user password and refresh cycle had been a bane to IT administrators. For instance, companies with a three-month password refresh cycle were instead constrained by the time limit of one to two months imposed by Microsoft. This is no longer an issue with Office 365, he noted.

Rohan Kamis, managing partner of midsize accounting firm Rohan Mah & Partners, added that the e-mail spam filtering technology found in Redmond's online e-mail service is a marked improvement to the antispam software he had previously deployed.

"Previously, I would have 300 spam [messages] daily in spite of the spam filter we had installed but this has gone down to zero after we signed up for Office 365," he said during the media briefing.

Interest in the online productivity suite is gaining traction within Singapore, revealed Jessica Tan, managing director of Microsoft Singapore, during the briefing. Initially aiming for 100 customer sign-ups when the offering was first made available to local customers via a syndicated partnership with StarHub in April, Redmond currently has about 500 businesses registered for the service.

Besides Singapore, Office 365 is also available in the region in Hong Kong, India, New Zealand, Australia and Malaysia, the company stated. This is part of a wider global launch in which the service made its debut to 40 markets.

Cloud to expand Microsoft's customer base
Microsoft executives, who attended the launch, also stressed that its cloud-based offering will not cannibalize its existing software business.

Rajesh Jha, corporate vice president of Exchange at Microsoft, said it only targeted 15 percent of the total IT spending pie with its traditional software offerings. With cloud and Office 365, Redmond can now go after the services portion of the pie as well, he noted.

Specifically, the pay-as-you-use model and low initial investment costs will allow the software giant to expand its offerings to previously untapped groups of users, including kiosk workers and those who had no access to PCs, he said.

Andrew Pickup, COO of Microsoft Asia-Pacific, cited the example of Hyatt chain of hotels which had segmented its users according to their job scenarios to provision a variety of Office 365-based tools. For employees such as bellboys and cleaners who were previously out of the organization's digital communication loop, the US$2 per user per month option to equip them with e-mail accounts is now a possibility for large enterprises, he said.

Pickup added that among the small and midsize businesses (SMBs) in the Asia-Pacific region, the number of users running the latest Microsoft software is "in the low double-digit range and nowhere near where we would like them to be". Reasons for this range from inflexible licensing fees to piracy, he explained.

To address these challenges, he said the Office 365 offering will help Microsoft deliver the latest technologies to companies regardless of their size and at a low cost. Reducing piracy will be a positive by-product, according to him.

The pricing schemes for Office 365 ranges from US$2 to US$27 per user per month and is meant to provide flexibility to meet different enterprise needs, Pickup said. For SMBs, the US$6 per user per month pricing is meant to cut out complexity and offers a slew of tools including Office Web Apps, Microsoft Exchange Online and SharePoint Online, he added.

Despite improved functionalities and more flexible price plans, Ovum's principal analyst Richard Edwards said in a statement Thursday that the current iteration of Office 365 is still a "one dot zero release" and is less than perfect.

"Microsoft has said that it will 'release' updates to Office 365 every 90 days, so business and IT managers should reassess this offering on a regular basis to determine its overall appeal and business value," he added.