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Office 365 packages that targeted small and midsize businesses. At the time, it wasn't clear whether the new products' subscription-based licensing and cloud-delivery model would appeal to SMBs. In recent months, however, Office 365 has begun to show its value for smaller operations, particularly those that rely on mobile workers, and those that are in the process of expanding.
Conventional standalone licenses have been the norm for SMBs, and when Microsoft priced Office 2013 products such that customers were pressured toward Office 365, many wondered whether the new packages would actually help most customers, or whether the subscriptions simply helped Microsoft translate one-time purchases into perpetual revenue streams. Office 365 offers users the ability to run Word, Excel and other applications on up to five computers, and ensures that businesses have the latest and greatest versions of the products. But, given that aging versions of Office remain adequate for many tasks, the extent to which Office 365 could add value wasn't immediately obvious.
At Excel Anesthesia, a Dallas-based healthcare provider, that value has become increasingly clear. Because the organization's physicians are constantly on the move, traveling from one hospital or clinic to the next, it needed a secure method for coordinating schedules and duties. Office 365 filled this need not only because the cloud can connect mobile workers but also because Microsoft assumes so many of the product suite's management tasks. This flexibility allowed the company to avoid setting up an on-premises server, a move that, as of April, had saved the company 83% relative to conventional setup costs.
[ Microsoft is trying to make amends for business' dismissal of its latest operating system. See Windows 8.1: 10 Surprise Benefits. ]
At that time, Excel had 26 doctors on its roster. Since then, the organization has gained more than 30 additional physicians in a merger, and according to Dr. Michael Walsh, who serves as Excel's chief IT officer, Office 365 has continued to pay off.
"I'm a physician, so I have to focus on what I'm doing, and for these other needs I need to find parties that I can rely on," Walsh said in a phone interview. He said that because Excel Anesthesia lacks the infrastructure of a full hospital, Office 365 has been essential to helping the organization's resources scale with its staff while also keeping confidential medical content safe. In particular, he pointed out that Microsoft signed a Business Associate Agreement (BAA). Few competing companies have signed such agreements, which means that Microsoft assumes the risk if its technology fails to comply with regulations.
In signing the BAA, Microsoft is essentially saying, "We recognize that this information is special, and we'll work to safeguard it," said Walsh, who added that there's "No one I trust more" in this regard than Microsoft.
Walsh also said Office 365 is useful because Excel relies on a BYOD environment; though Microsoft offers only light support for certain products, such as the iPad, its cloud-based delivery model means that doctors can access important information on virtually any device they choose.
Office 365's ability to connect mobile workers and support multiple devices has also been crucial to Flo Wines.
Part of a larger lifestyle brand co-founded by jazz musician Marcus Johnson, Flo Wines has only a handful of employees. As is the case at many small businesses, the small staff means that each employee wears multiple hats within the company. Often, this means that close collaborators are in different cities taking care of different priorities. For years, smartphones and email have helped such companies stay organized, but in an interview, Johnson said that Office 365 is a better solution.
"Our company is two guys with a lot of friends and supporters," he said, explaining that Office 365 allows Flo Wines to utilize robust infrastructure despite its small scale.
He also praised the simplicity of the subscription model. "The most valuable thing we have is time," Johnson stated, explaining that because Microsoft takes care of management and upgrades, he is free to focus on business tasks, such as negotiating the inclusion of Flo Wines at stores and restaurants, or traveling to jazz festivals where he showcases his product while performing.
Johnson said that Office 365 allows him to avoid worrying about many of the pitfalls that road warriors commonly face, such as dead smartphone batteries or broken-down computers. The day of an event, he elaborated, schedule details might change on the fly, meanings that the ability to access Office from a borrowed machine can provide invaluable.
Johnson was also impressed by some of Office 365's smaller touches, such as Outlook's ability to recognize when a user intended to attach a file to an email but failed to do so. "That's real," he said. "When I almost forget to send a proposal, and Office 365 catches me, how do you quantify that value?"
The ability to easily communicate via Lync, meanwhile, only adds to Office 365's tools for mobile workers, he said.
For some SMBs that operate out of traditional office environments, many of the above benefits won't apply. If a company doesn't rely on mobile workers, for example, Office 365 might not justify upgrading from older versions of the software. But because the product can reduce on-site management costs, many companies -- even those without robust mobility needs -- have found that Office 365 can reduce annual IT costs by hundreds of thousands, and sometimes even millions, of dollars.
Other features, meanwhile, such as security for regulated industries, or the recent introduction of Office for iPhones, may be compelling for BYOD environments and for companies that rely on mobile or remote workers.
Google, Apple and other Microsoft competitors are working to improve cloud-based productivity software of their own, and it remains to be seen how many Office users will gradually explore the new offerings. For some SMBs, these alternatives will make sense, as will sticking with older versions of Office. But with the industry's broadest set of features and a list of benefits that can appeal to different segment of the market, Office 365 may help Microsoft maintain its edge.