Office 365: Weighing Up The Pros and Cons

Published in Computerworld UK

Should your company deploy cloud applications?

Everyone’s talking about Microsoft’s Office 365 – so what’s all the fuss? Essentially it offers a web-based suite of software and services that provides an impressive array of enterprise-level functionality at commodity-level pricing. But as with anything there are downsides, so before jumping in we suggest CIOs first trial it thoroughly in a production environment.

Cloud services are rapidly becoming this decade’s most popular answer to business IT efficiencies. Whatever the question, the cloud probably has the answer. The biggest online-centric companies in the world are offering cloud services, from Google to Amazon, and now Microsoft too has entered the fray with Office 365, a web-based software suite supported as a cloud-based SaaS (Software as a Service and/or Service as a Service), which launched in June 2011.

So what’s all the fuss about Office 365? In a nutshell it offers enterprise levels of security and resilience at commodity-based, pay-as-you-go pricing: the kind of costing model associated with public clouds. Office 365 combines the Office Professional software suite as a web-based solution, together with MS Exchange (messaging), SharePoint (document server) and Lync (communications server) as online services. All of this functionality is supported with a 99.9% uptime guarantee (about 9 hours per year of downtime) built into the service level agreement.

Pay-as-you-go pricing

Among the perennial complaints about MS Office products are the high cost of software licences and the difficulty in keeping track of and updating each seat – that’s before even looking at the costs of server investment and desktop maintenance. To overcome this, Microsoft has based the cost modelling of Office 365 on the public cloud’s ‘pay-as-you-go’ norm for commodity-based consumption. The cloud’s pricing model, which assumes little if any customisation, is rather like paying for your phone or electricity utility: you are charged only according to how much of the service you use. This pay-as-you-go approach accounts for much of the cloud’s popularity as it obviates vast amounts of maintenance, IT investment and other expensive overheads. It also enables budgeting predictability and great flexibility: a new office, department or business unit could be up-and-running in a fraction of the time traditionally required. Indeed on its costing structure alone, Office 365’s Pay Per User structure and its associated ROI, looks to be one of the strongest planks in its business case.

Why bother migrating?

While it’s a fact that most or all of the above could be achieved by running existing MS apps and best-of-breed communications software/services either offsite through an external service provider or via the company’s own intranet/extranet/infrastructure – without the security issues posed by the public internet. So why bother going to the time, expense and hassle of adopting Office 365? To answer this we must consider the business case for the cloud in general.

For large organisations looking to cut the costs of running large data centres (both in terms of capital investment and maintenance) sharing the compute facilities in the cloud offers a cost efficient alternative to either running their own infrastructure or outsourcing, whose charges, depending on the level of service, can be high. For smaller organisations – or the business units of multinationals – having the ability to collaborate efficiently at a fixed cost per seat is a serious attraction.

To fully answer the questions around pricing, one needs to ascertain the level of complexity within the organisation, the service and quality levels required, processing and transaction volumes, desktop pricing, depreciation rates and support overhead. Then one needs to understand the aspects of cost that feed and water the existing MS Office infrastructure including the power, cooling, monitoring and housing costs of keeping the server infrastructure up and running. Then, and only then, can you determine if the Office 365 pricing is going to work for you.

What about security?

One of the chief reservations CIOs have about using the cloud is the security implications of sharing their company’s competitive business information, whether it is generated by emails, document sharing, video conferencing, or is simply sitting in the customer database or other repository. They fear leakage when potentially hundreds of other organisations are sharing the same multi-tenant server. The idea of iron-clad firewalls in something as seemingly vaporous as ‘the cloud’ is anti-intuitive and takes a leap of faith, despite assurances by cloud providers concerning advances in security software. For those who are especially concerned about security, using Office 365 in a private cloud is an option. More costly than public clouds like Google, Amazon, etc., the private cloud typically uses virtual server infrastructures but provides greater exclusivity and a much greater emphasis on isolation software, dedicated cages and other security features. While a certain level of security features have specifically been included in Office 365 to address these challenges, to achieve the levels of security many data sensitive organisations require may well mean running Office 365 within a private cloud, which would inevitably increase the cost of adoption.

Potential productivity loss

Given all of the above advantages, migrating to Office 365 is certainly worth thinking about – indeed many no doubt will feel it’s a ‘no-brainer’. However, there are issues that need to be addressed. According to latest ImprovIT benchmark evaluations, Office 365 appeared to be somewhat slower over the web than in physical environments. To some extent this is to be expected when retrieving applications and data over the internet, but this doesn’t mean the user community will be any more tolerant of any decrease in performance and may have an adverse effect on their providers’ SLAs. Furthermore, users that work from home may have sub-standard internet connectivity and broadband speeds which would slow down application productivity compared to computer-based alternatives. Although the specific degree of productivity loss may be difficult to measure and quantify, users will simply vote with their feet by returning to the fat desktop.

Does it matter whether users adopt the web-version of MS office applications? From the CIO’s point of view migrating users to the web would enable them to leverage the cloud’s cost and efficiency benefits while reducing local computing power costs and capex. For an organisation with hundreds or thousands of desktop stations, moving users to netbooks or tablets would mean an enormous capex savings come equipment renewal. These savings then need to be measured against any productivity loss realised from using the web-based version of office applications.

The verdict? Each organisation needs to weigh up the advantages of cloud services and a web-based Office platform vs. productivity and evaluate it according to their particular requirements. It goes without saying that before making the switch, CIOs should undertake a thorough evaluation of all of Office 365’s cost and performance parameters on a trial basis inside their internal and external/remote working environments.

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