Office 365 preview shows some key omissions

A preview report on Office 365 by independent analyst Directions on Microsoft has said the service will offer strong competition to Google Apps and other cloud providers, but that IT managers should be wary of lost functionality.

Steve Ballmer will be hosting a special event on 28 June which is almost certain to be the launch of Office 365, which will replace Microsoft's current Business Productivity Online Suite (BPOS) and add some improvements, notably single sign-on (SSO) capability.

Based on early trials, analyst Wes Miller said that the expected product is much more complete than first thought, offering updated versions of hosting services of Exchange, SharePoint and Lync, as well as Office Professional Plus and Office web apps online under a variety of pricing plans.

"We're pretty pleased with the technology," Miller said.

"It's user friendly and a compelling offering that will give people looking at Google Apps pause for thought. It'll be a little more expensive, but offers some significant improvements in terms of familiarity."

The company will be offering two kinds of Office 365 user: standard and dedicated. Standard, expected to make up the vast majority of users, will have data hosted on shared servers, although it will be partitioned for security.

Dedicated users, including Microsoft's government platform, will have data stored on separate hardware, usually for compliance or security reasons, and will have some extra services. Microsoft has raised the minimum order size for dedicated services from 5,000 users to 30,000, and a significant price premium is expected for the service.

Miller suggested that within the Office 365 suite, existing Microsoft users will see least change with Exchange, with most of the existing on-premises functions replicated. Users get a 25GB mailbox, built-in Forefront anti-virus and anti-spam technology and the addition of legal hold and email retention policies.

IT managers will not get the ability to expand and collapse address lists inside each other and Global Address List (GAL) user segmentation is not included in the cloud version. Companies using server-side MAPI or CDO systems also will not be able to use them with Exchange.

Early builds of Office 365 have severely limited SharePoint functionality, Miller said, but the latest version offered a much closer fit to on-premise systems. Microsoft has allocated 10GB of storage per tenant and 500MB per user and allows shared documents and schedules internally and externally, including via secure Extranet sites.

However, search integration is lacking, with no support for Exchange or Windows 7 searching allowed, very little business intelligence support and Microsoft has limited the degree to which custom software can be integrated.

"If you've spent a lot of time developing SharePoint code it may or may not fit, but if you're designing for the 2010 version chances are it will," Miller warned.

"There's also no scripted management, but that said, there is not a lot to manage online with this."