You may recall earlier in the month that Microsoft announced that it was making Office 365 cheaper by up to 20%. With low-level entry barriers for its competitors such as Google and Zoho, it’s not unlikely that those prices will drop again, especially as Microsoft says it is cutting internal costs. But even with the reduced pricing, is Office 365 – and, in particular, SharePoint Online -- really for you.

In a paper from AvePoint released at the end of September, just as Office 365 was beginning to make traction in the enterprise, it examines whether SharePoint Online through Office 365 is suitable for your company. This is particularly relevant now that pricing is starting to get become attractive for all size companies.

Entitled Office 365 SharePoint Online -- what does it mean to my organization as a CIO?, the paper argues that, while there is a lot of competition in the market, the biggest challenge is reluctance of organizations to move data and applications from on-premises servers and clients to the cloud, and, in this case, the Microsoft cloud.

On-Premises vs. Cloud

We have already looked at the advantages of cloud computing on many occasions. But there are other factors that companies need to consider before making the cloud jump and it may be that these outweigh the cost factors that products like Office 365 offer.

These include:

  • Security: Data is maintained outside the firewalls of the enterprise, with control administered by people who are not enterprise employees. Many companies are unwilling to make that jump of faith.
  • User Authentication: Security is usually guaranteed by SSLs, which are username- and password-protected. There is always a fear that these passwords will be broken.
  • Storage: Storage is generally priced on the amount of information stored. Once the amount of information stored goes beyond the amount agreed on, it gets expensive to store added data.
  • Data Sovereignty: There is no guarantee that data stored in the cloud will be stored in a geographical location that adheres to the compliance regulations applied to the enterprise in question. For example, AvePoint says, organizations in Australia and New Zealand that store information outside of their country are a breach of their policies.
  • Reliability: As many offerings are still new, there is no record of reliability. There was already a three-hour Office 365 Exchange 2010 outage for a select customer base in the North American Data Centers in August 2011. Microsoft communicates with customers on progress of resolving the outage via the Service Health Dashboards available to Administrators of Office 365 instances.
  • Content Separation: It is often difficult in hybrid systems in classifying content in the same manner in the two systems, and deciding on which system content should be stored.

There are many other issues that arise, such as the location and way development environments are managed, or bandwidth and policies around how and what is stored where and when, which will arise according to the enterprise, but these are the main issues to date.

Office 365

So what does Office 365 do and how does it cover these issues, if at all? When it was launched it came in two editions, standard and dedicated:

  • Standard: Comes with two service plans, including "Professionals and Small Business” (Plan S) and “Midsize Business and Enterprise” (Plan E). It is a multitenant environment, meaning one SharePoint Online Farm is shared by a number of organizations isolated from each other.
  • Dedicated: Built for larger enterprises on request. However, AvePoint says Microsoft is trying to limit the number of these deployments to encourage enterprises to use Standard. The dedicated edition is an isolated SharePoint Farm for each organization.

Both editions come with Exchange 2010, Lync 2010 and SharePoint 2010, with fees levelled on a per-month basis and based on features allocated to each user. Plan E’s pricing is also slightly more flexible as it is worked on features allocated to each user and includes a license for the Office Professional Plus suite for each user.

Office 365 Benefits

There are a number of advantages to using Office 365 that deal with many of the concerns outlined above. As the majority of enterprises will use the standard deployment, let's look at some of the benefits of that. They include

  • 99.9% uptime: With the Plan S and Plan E, Microsoft guarantees uptime on all services in Office 365 of 99.9%. This is specified in the SLAs, which offer compensation where this target isn’t met.
  • Certified Security: Microsoft guarantees security and privacy through certification with ISO 27001 and EU Safe Harbour certification, as well as completing SAS 70 Type II audit. All three are tightly regulated standards guaranteeing Office 365’s safe use.
  • Multiple Datacenters: There are hosted data centers all over the world, so when an organization requests an Office 365 service, the service will be located closest to the organizations headquarters. These means that for global organizations, performance will be determined by proximity to the headquarters. There is also a data center in each region to ensure full redundancy.
  • Global Collaboration: Despite issues around geographical location and performance, Office 365, to all intents and purposes, enables real-time collaboration. This counters the over-reliance on email, which takes time and takes the real out of real-time.
  • Office Suite Integration: Many organizations are already using the Office suite, and SharePoint 2010 has rich integration with Word 2010, PowerPoint 2010, Excel 2010, OneNote and Outlook 2010.
  • Offline Capability: The Office suite also comes with SharePoint Workspace, which in turn comes with offline capabilities.
  • SharePoint 2010 Capabilities: We have looked at SharePoint 2010 capabilities over the past few months, but they are extensive in the fields of enterprise content management, business intelligence, enterprise search and portal space.
  • Lower Startup Costs: The initial costs are considerably lower for all of the Office 365 applications, because Microsoft takes care of design and setup elements.

Office 365 Considerations

There are a number of things that organizations need to consider before rushing out and investing.

  • Infrastructure Service: Office 365 offers SaaS, which means Microsoft takes care of the underlying infrastructures for its customers. Its responsibility ends at creating the SharePoint Web Application.
  • Organization Managed Service: An enterprise will still need in-house skills to design, build and maintain the content hosted in each Office 365 application.
  • Support and Troubleshooting: Microsoft recommends organizations use the Microsoft Online Community as first-response support. This is monitored by Microsoft staff around the clock, but there’s no recorded response time. Support for all Office 365 plans is available through the Community Portals.
  • Archiving Content: Planning is vital for future development as the storage limitations and the costs of exceeding those limits make it an expensive business if it is not anticipated in advance.
  • Missing Major Functionality: There are major functionality differences between the online and on-premises version.

One clear differentiator between on-premises and the cloud SharePoint 2010 offerings currently is that there is major functionality missing from the cloud offering:

  • Business Connectivity Services
  • FAST Search
  • Performance Point Services
  • Project Server
  • Power Pivot
  • Secure Store Service
  • Reduced Customization Functionality

In addition to these points, IT and Business users and administrations will not have the same level of access to SharePoint 2010 online as they will with the on-premises version. There is an Administration console, but it only has a limited subset of what is available in the on-premises edition.

Migrating to Office 365

Once the decision is made to move to Office 365, it is important then to decide what kind of content is going to be placed there. Usual scenarios include is that teams that are collaborating on content in the on-premises version will be moved to Office 365.

For content that exists already, there are a number of approaches to migration:

Direct Migration

These migration products send content via open web protocols from source to destination directly. It has no additional infrastructure and does not require any additional storage. With the direct approach, however, there is no opportunity to clean up in a stage environment.

Staged Migration

This requires on-premises SharePoint 2010 server used to stage the content from the local source before moving the content in one move at the end of the process. Enterprises doing this can remove duplication before moving into Office 365.

This also reduces the amount of content that needs to be migrated as well as enabling enterprises test and validate the content at this point. However, it also requires staging infrastructure with appropriate storage capacity.

These are just some of the benefits and limitations of the Standard Office 365 SharePoint Online edition.