Microsoft Touts Early Interest In Office 365 Cloud Apps

Microsoft sees Office 365 as the linchpin of its cloud efforts, judging by how much Microsoft executives are beating the drums for the cloud application suite at the Microsoft Worldwide Partnership Conference this week.

"It is the future of Office," said Kelly Waldher, Office 365 product management director, said in an interview Tuesday. He pointed to a Forrester Consulting report that said Office 365 users could realize a 300-percent ROI with a payback period of just two months.

Office 365 went live on June 28.

At past WPC events Microsoft executives, from CEO Steve Ballmer on down, have focused on convincing channel partners that Microsoft – which generates nearly all its revenue from on-premise products like Office 2010 – is serious about cloud computing. With more cloud-based products such as Windows Intune, Windows Azure, Dynamics CRM Online and now Office 365 in its product lineup, the emphasis this year is on touting what the company sees as its cloud momentum.

"It is my opinion that Microsoft and our partners are being massively under-estimated right now," said Jon Roskill, corporate vice president of Microsoft's worldwide partner group, speaking about the company's cloud initiatives during Tuesday's keynote session.

In another sign of the interest Microsoft channel partners are showing in the cloud, Roskill said more than 20,000 partners have signed up for Microsoft's Cloud Essentials and Cloud Accelerate offerings. Cloud Essentials provides partners with technical and sales support, marketing resources and cloud software internal-use rights to help them build cloud-computing solutions. Cloud Accelerate is a program that rewards high-performing cloud service partners.

Microsoft also has been touting the results of a survey of partners that found that 58 percent are already working with cloud technology to some extent. Waldher said more than 41,000 partners work with Microsoft's Business Productivity Online Services (BPOS), the predecessor to Office 365, and many of them are expected to move to the new product.

The "vast majority" of the 50,000 Office 365 trial users are new Microsoft customers, Waldher said. More than 200,000 businesses and organizations participated in the Office 365 beta and Waldher said Microsoft is taking steps to enlist them for the 30-day trial. And Microsoft will transition BPOS users to Office 365 as well.

While customers are signing up with Microsoft for the Office 365 trial, Microsoft executives expect channel partners will eventually be involved with most Office 365 sales. Waldher said an "Order on behalf of" system, through which partners can place Office 365 trial and subscription orders for their customers, is now up and running. That makes the solution provider the partner-of-record for the deal, according to Waldher, even though Microsoft is handling the billing for the Office 365 service.

Microsoft also said that in this year's fourth quarter Microsoft will begin offering its Dynamics CRM Online application as an add-on option for Office 365. While customers can use the two products together today, Waldher said making the on-demand CRM product an Office 365 option will simplify billing and subscription management.