Office 365 Won't Eat Into Microsoft Office Sales

Tweet

Cloud computing has been called a game-changer, because it might soon negate the need for desktop-based software. But with the launch of Office 365, Microsoft is confident that it will even help improve their desktop software business.

Microsoft has recently launched Office 365, its cloud-based productivity suite that essentially brings Microsoft Office to the web. This enables small and medium enterprises to afford the office suite, which previously involved a big investment in desktop software. While cloud computing is often seen as a potential threat to desktop software, Microsoft is confident that Office 365 won’t eat into its Office business.

Google has already made headway into the cloud computing market, with Google Apps, which has traditionally been considered a big threat to Microsoft Office. In an interview with Cnet, Microsoft’s Office Division president Kurt DelBene is confident that the new cloud-based suite will not cannibalize Office, but rather give business users a means to scale. Smaller businesses will find it more cost-effective to use Office 365, while bigger enterprises that need better functionality will find Microsoft’s Enterprise offerings more ideal.

We’ve created offerings that are specific and hit the needs of particular customer sizes. We’ve done that not out of a point of view of cannibalization, but rather from a point of view of if you’re a small business of less than 50 customers, let’s create an offering that’s tailored for you. If you’re a large customer that does Active Directory synchronization that wants rich archival, then we’ll figure out an offering that’s specific to them as well. We think we’ve done a pretty good job of focusing on offerings that are unique to specific business segments.

DelBene says Office 365 is an evolution in how people do business. From Microsoft’s business perspective, what’s important is meeting customer expectations. The company’s cloud-based initiatives are not actually new, but have been under development for as long as six years now. While people have been thinking Microsoft is late in the game (with Google Docs and Google Apps having launched earlier), perhaps they’re actually just right on time. With interest for cloud-based computing taking off, businesses are becoming more keen on getting their work online, as opposed to a few years back, when cloud computing was mostly seen as a grassroots approach to document management.