Analysts impressed with Office 365, but still a long way to go

Microsoft has finally launched its long-awaited Office 365 cloud computing applications suite, and industry analysts have found a lot to praise, but also some real holes in Redmond's offering.

The launch of the Office 365 package, a considerable upgrade from Microsoft's current Business Productivity Online Standard cloud offering, is a major step away from Microsoft's core business, according to Wes Miller, an analyst at research firm Directions on Microsoft.

"Our customers have been asking for a competitively priced Microsoft package, and with Office 365 the company threw in desktop applications and a couple of free products," he told V3.co.uk.

"If you'd have suggested this at Microsoft 10 years ago you'd have been called insane. Sure, the Office 365 package can be more expensive, but it's actually very good value, once the costs of [shifting] servers onto Google Apps is taken into account. There are a lot of hidden costs to that."

Miller pointed out that shifting an Exchange server to Google is a major undertaking which cannot easily be reversed. Microsoft also has a lot of experience in enterprise support, an area of business expertise that Google lacks.

Google's cloud applications are very much seen as the competition to Office 365, and the two companies are currently competing fiercely to roll out these kinds of services to businesses, governments and consumers.

Up until now Google has had the edge in terms of services offered, but now it faces a real challenge.

"Microsoft Office 365 will definitely be competitive with Google and already is," Christopher Voce, principal analyst for infrastructure and operations at Forrester Research, told V3.co.uk.

"One reason is that these migrations are being led by email. Microsoft owns the vast majority of the email market today, north of 70 per cent among enterprises.

"Microsoft and Google have been sparring over defectors from other platforms and have momentum, but Microsoft has far more momentum among the enterprises that I survey and speak to."