Here is my answer to that question.

Beyond just the functionality advancements that Microsoft has made to their standard Office software offerings, Office 365 also exists to give you an easier and cheaper way to access that functionality. Perhaps we should start by defining exactly what Office 365 is, and then we can better understand why it could be good for you.

First of all, in this “new” age of cloud computing and virtualization, the big idea floating around for everyone is reducing IT costs. This is one thing Office 365 accomplishes pretty well. It is a cloud-based method for accessing Microsoft’s Office suite software that has less up-front costs (aka “Capital Expense” or “Cap-Ex”) than their traditional on-premise software implementation. This is good news for most business owners as this means less money they have to spend out of pocket. Office 365 fees are broken down monthly on a per-user basis, so as opposed to spending a significant amount of money all at once in the beginning (or over a specific time period if you use financing), you have the option to pay a nominal fee on a monthly basis over the course of your fiscal year.

[If you are at this point wondering what cloud computing actually is, you should probably take a moment to Google “cloud computing” and get a quick crash-course. It should only take about two minutes to digest the concept. For the purposes of this discussion, I will provide a quick one sentence explanation just for reference:

Cloud-Computing= Instead of your software applications being run from systems that exist at your office location, applications are run from a hosted system that exists in a secure hosting facility (ie. Datacenter), from which they can be accessed over the internet via your personal computer.

Further discussion about the benefits of this configuration can go on and on for hours and take up more space, so this will end here.]

Now that you have a basic idea of what Office 365 is, let’s talk about what services are included and why it can be useful to you. [Hopefully you are already a fan of Microsoft and basically familiar with their business software offerings. If you are not a fan, then Office 365 (and by extension this post) is probably not for you].

The most basic Small Business plan or package for 365 (P1) comes with the following:

• • Email and Calendar sharing (i.e. Microsoft Exchange 2010)

• • Instant messaging, PC-to-PC calling, and video conferencing (ie. Microsoft Lync 2010)

• • Web-based viewing and editing of Word, Excel, PowerPoint, and OneNote files (this is a new one – Microsoft Webapps. Think Google Docs and then apply Microsoft Office functionality)

• • Team site for sharing files (i.e. Microsoft SharePoint 2010)

And that’s just the base-plan (for your reference, all pricing for Microsoft’s Office 365 plans and packages can be found here). You have the option to add-on additional features from there, and you can also purchase just the email-only version if you REALLY have no interest in getting all the other features included for free (well, almost free – an extra $1 per user per month).

Some of the more robust packages come with additional services for only a slightly higher price. They all start with the base as listed above, but add on some different features. For example, the Enterprise level plans start with the same base configuration of the P1 plan listed above, but they also give you additional options in addition. You can configure your on-site domain controller to synchronize with Microsoft’s Office 365 service in order to control and configure user accounts from your office site in the traditional way. The E3 plan (E for Enterprise level) includes licensing to install Office 2010 Professional Plus on your personal computer. You get one license for Office 2010 per user.

There’s also a series of “À la carte” services that Microsoft offers that you can pay a few dollars extra for and add to your Office 365 subscription. Of course, you can also get some of the services listed above as a “standalone” if you want, without subscribing to a full Office 365 package.

Some of these services include:

• • Office Professional Plus 2010 monthly subscription

• • Exchange Online Archiving

• • SharePoint Online Plan 2 (an advanced version of SharePoint online)

• • Microsoft Dynamics CRM

• • Lync Online Plan 2 (advanced Lync online version that includes audio and video conferencing and multiparty data sharing)

This may sound wonderful to you, but there are some drawbacks to this service as well. After all, nothing can be absolutely perfect can it? There has been quite a lot of anger directed towards Microsoft about the daily recipient limits that they enforce for each Office 365 customer. On the Enterprise level plans, Microsoft enforces a limit of 1,500 individual recipients per day and they only just recently increased this same limit for their Small Business customers from 500 to the same 1,500 as well. That means that as a company, you are only able to send emails (an unlimited number) to 1,500 unique individuals each day. This may not matter to most folks, but if you are doing email blasts and mass-marketing directed at more than 1,500 people, this could adversely affect you.

Office 365 email hosting also has a 25GB size limit on each individual mailbox. Typically, 25GB should be more than enough space for the average email user, but in some cases it is not sufficient. Also, Office 365 only recently obtained the ability to synchronize email, calendars, and contacts with Blackberry devices, but it does require the use of RIM’s cloud-based BES service. Unlike Active Sync functionality for smartphones such as Droid, iPhone, and Windows Mobile, the BES sync for Blackberry devices is not included with the Office 365 email service – yet it is still available free of charge in the same way as the Active Sync functionality.

As you can see, Microsoft gives you lots of flexibility and options when it comes to using their Office 365 services and everything is very competitively priced, especially when compared with other competitors in the cloud-computing marketplace. If you have any questions at all or are curious about this whole Microsoft Office 365 thing, or if you’d like to begin a free 30-day trial to try it for yourself, please feel free to email me.