The days of Microsoft SharePoint being only a locally installed software product are over.

Microsoft's commitment to SharePoint in the cloud is evident in its massive data-center investments, its costly retrofitting of the code base to support multitenancy and access via subscription and its emphasis on "cloud" in sales and marketing efforts. But the reality is Office 365/SharePoint Online are still only release two and Microsoft usually needs three releases to get a product right.

The Choice Ahead

Will SharePoint in the cloud work for your organization -- and is now the time?

SharePoint in the cloud is a relatively new product and today it's not right for every organization. In a July 2011 survey, Forrester asked IT professionals who had deployed SharePoint if they had considered Microsoft's cloud options. Only 17 percent responded that they'd never considered a cloud deployment of SharePoint. But 42 percent indicated that they deployed the platform before SharePoint in the cloud was an option, suggesting to us that customers don't dismiss out of hand SharePoint in the cloud.

Success with SharePoint starts with a real strategy. This has always been true, but it is doubly applicable to SharePoint in the cloud and triply important for organizations hoping to move on-premises applications into the cloud.

Six Elements of a Cloud Migration Strategy

Whether you decide to adopt SharePoint Online now or wait for the next release, your strategy should contain six elements:

Make governance your first task

Too many SharePoint implementations incorporate insufficient governance and it is very painful to add governance after your organization already has hundreds of sites deployed. SharePoint in the cloud will require extra legal and security governance simply because those topics are so new to most professionals.

Establishing governance for your information architecture and site change management are next on the list -- again with particular attention to special concerns raised by cloud deployments in general.

Determine if "vanilla" functions provide sufficient return on investment (ROI)

Office 365 extends core SharePoint dramatically and brings the offering very close to full parity with the on-premises version. However, 57 percent of organizations surveyed extend SharePoint core capabilities through the use of third-party add-ons. Many of these add-ons are for enhancing areas like workflow and social capabilities that may not be robust enough to meet some organization’s requirements in Office 365. The most prudent assumption is that you'll use SharePoint Online to provide only basic scenarios for now. Determine if that's enough to provide real ROI for your firm.

Establish your customization strategy

Your key challenge will be finding a way to keep requirements for customization at bay -- never an easy task. Don't commit to more than simple customization projects at the outset, as SharePoint Online is not well-suited to heavy customization. Give your teams time to determine how to best make use of new customization techniques, such as moving logic into client-side JavaScript and hosting logic in an environment external to SharePoint.

Create realistic migration expectations and a plan

Too many SharePoint customers assume that if an application runs on SharePoint Server 2010, it will also run in SharePoint Online. A fair number of custom SharePoint applications simply won't migrate to SharePoint Online because their code doesn't fit Microsoft's conventions.

Engage early with Microsoft to determine what's possible to migrate from your current SharePoint portfolio  and set low initial expectations among your business sponsors. Prepare them for the possibility that some applications simply won't migrate to SharePoint Online.

Carefully evaluate threats to application response time and potential solutions

SharePoint Online could represent a double whammy on performance, as it both centralizes content and interposes Internet links between individual customers and content. Requests traveling over the Internet are beyond your group's ability to optimize. A strategy that considers third-party support like the announced partnership between Akamai and Riverbed to address latency issues may be required.

Realistically break down your integration requirements

SharePoint Online provides access to Business Connectivity Services (BCS) for integration of back-office data into sites and lists. That's good news, but make sure your teams understand the risks to data security, application responsiveness and reliability and complexity of cloud-based integration before using BCS. Just because integration is technically feasible does not mean your security professionals will allow it. Also, SharePoint Online's specific idiosyncrasies for integration aren't yet well-understood, and so approach the feature with extreme caution.

Editor's Note: Other SharePoint 2013 articles you might be interested in:

SharePoint Adoption: Is Customization  the Rally Cap? by @seattlerooster