Last month, a colleague and I were recalling a conversation we had at a SharePoint conference a few years ago. At the time we were debating whether Office 365 would have more success than its predecessor, the Business Productivity Online Standard Suite (BPOS).

The funny thing is that neither of us could remember which conference it was. So I looked it up and it was way back in 2011 in Anaheim, California.

iThe debate is old news today. Microsoft announced that Office 365 is a $2.5 billion dollar business at its World Partner Conference in July.

Quite a Success

This and other data points indicate Office 365 is on its way to being a significant success.

That does not mean that there are no detractors. From security to reliability to a loss of control, there are still valid arguments against the cloud in general and Office 365 in particular. It is getting harder to counter the value proposition of hosting something like your Exchange in the cloud.

Office 365, however, is much more than a hosted email platform. Since my personal focus is on SharePoint and OneDrive, I was curious to find out how customers are adapting and using these services in the cloud and comparing that with the use of analogous systems, including SharePoint, My Sites and File Systems within the corporate environment.

Unfortunately Microsoft does not release a breakdown of Office 365 subscriptions or, for that matter, the services customers use. So my observations are strictly based on speaking with existing and potential customers, partners and some advisers at Microsoft.

As anticipated adoptions can be summarized by three buckets.

Bucket No. 1: The Cloud

These customers are all in and moving their entire environment to the cloud including Active Directory, Exchange, SharePoint, OneDrive, etc. In terms of pure return-on-investment, this is the ideal scenario.

Let Microsoft deal with the hardware, software upgrades and reliability, freeing the customers to work on their business. In reality, there are few organizations that have been able to fully embrace this model. When it does occur, they tend to be smaller or with light duty or no SharePoint implementation.

That is not to say that there are no exceptions. There have been several Fortune 1000 companies that have committed completely to the cloud. But this is an ongoing and challenging process. More on this later ...

Bucket No. 2: On-Premises

These customers are generally on the other side of the equation. They have decided to keep their environments inside their own IT infrastructure (for now, but stay tuned).

Although we have many customers who are exclusively on-premises, only a small portion do not have a cloud transition plan. It is important to note that especially with SharePoint, some customers have invested heavily into development of full-trust solutions, branded customizations and integrations to other systems. None of these can or necessarily should be moved to the cloud.

Bucket No. 3: Hybrid Cloud

This brings me to the last category — customers who have moved some aspects of their environment into the cloud, while keeping either part or all of their SharePoint implementation in-house.

From a glance, this is the best of both worlds. Customers can leverage the benefits of the cloud, while maintaining sensitive data and customized environments on-premises. On the other hand, it is also arguably the most challenging, requiring definitive decision-making on what should and should not be transitioned to the cloud.

As I discussed in a previous article, SharePoint (and OneDrive) must be managed and monitored. Moving it to the cloud does not absolve customers from this responsibility. It could be argued that a hybrid environment makes that job, in fact, more complex and difficult.

Last month, Microsoft announced the FastTrack program to onboard customers into Office 365. The program is primarily intended to cover “Day 1” tasks, which includes getting the tenant up and running, configuring users and groups (via DirSync, ADFS or other) and then migrating email. Along with access to Lync and Yammer, this gives customers a big bang for their buck and foothold in the cloud.

So what happens “Day 2”? The reality is that if you have SharePoint on-premises, it will likely still reside there. Moreover, customers with any significant investments into SharePoint should be preparing to embrace a “hybrid cloud evolution.” I would argue that this, in fact, is the rational approach and there are specific steps that you can take to begin:

  1. Office 365 provides several integration points between your local and hosted SharePoint (you can learn more here). These include hybrid Search, which allows you to discover content in both a local and hosted environments, Single Sign-on for seamless access between the environments, and hybrid BCS, which connects on-premise data source to SharePoint online. At this point I would classify these as light integrations and I do believe that Microsoft is planning to add more. Nevertheless, something as simple as identifying and accessing content regardless of where it is located removes an important technical and psychological barrier to a hybrid implementation.
  2. I touched on this before, but you should perform an inventory of your SharePoint environment. I am big fan of classifying into three buckets: the first for site collections that can be easily transitioned to the cloud, the second for site collections that will require some effort but should still be migrated, and the last for site collections that are heavily customized and should probably be left on-premises, re-written or retired.
  3. Consider moving your My Sites and user file shares to OneDrive for Business. Microsoft is offering up to 1 TB per user of storage with each Office 365 license. In most cases, these are simple file storage repositories where much of the content is rarely accessed. Yet it requires dedicated resources for monitoring, backup and administration. Leveraging OneDrive for Business removes this burden and in the case of file shares, allows users to access, find and collaborate from anywhere.
  4. Customers should develop a plan to monitor, administer and backup their hybrid cloud. It is probably safe to say that the management approach that you have for on-premises will not apply to the cloud. Another obstacle is that in many organizations, the resources responsible for local SharePoint including hardware deployment and SQL server management are not required for cloud-based roll outs. Instead, other skillsets such as content security and user licensing are more appropriate.

Other Challenges

One of the most common complaints about SharePoint is just how complicated (and therefore expensive) it is to implement and maintain, especially in relationship to enterprise cloud file sync and share tools.

Some of this criticism is fair. Microsoft has tried to please everyone by including many obscure features and not restricting customizations. At this point, this is not a genie the company can easily put back in its bottle.

With Office 365, Microsoft has taken a different approach by limiting many capabilities to support a multi-tenant environment. On the other hand, it has put forward other services, such as OneDrive and Yammer to supersede features that have been traditionally associated with SharePoint.

Embracing the hybrid cloud starts by leveraging these and other cloud services for most business needs. This clearly leads to efficiencies and reduced costs. However, it must be recognized that some systems and processes should be kept in-house. The key is finding the correct balance.