Microsoft Rebrands BPOS, Unveils Office 365 Cloud Apps

Microsoft on Tuesday rebranded its clumsily named Business Productivity Online Suite (BPOS), added Office to the mix and took the wraps off a new cloud apps bundle called Office 365.

Microsoft Office 365 includes Office, SharePoint Online, Exchange Online and Lync Online and comes in small business- and enterprise-focused versions. Microsoft is now offering Office 365 as a limited beta in 13 countries and regions and plans to launch it worldwide in 2011.

At an event in downtown San Francisco, Kurt DelBene, newly appointed president of the Microsoft Office Division, said the elastic IT capacity of cloud computing make it possible to reach customers large and small. With Office 365, Microsoft is trying to address the full range of market segments.

Microsoft's Office 365 for small businesses is aimed at companies with up to 25 employees and costs $6 per user monthly. In addition to Office Web Apps, Exchange Online, SharePoint Online, and Lync Online, companies also get an external-facing Website.

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Although Exchange and Office are widely used in the small business space, products like Sharepoint and Lync have yet to reach this segment. Chris Capossela, senior vice president for the Information Worker Product Management Group, says Office 365 will give smaller customers a chance to kick the tires on these products.

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"This is a very good opportunity for Microsoft to expand our reach in the small business space," Capossela said at the event. "We think that the independent professional working on their own is going is going to love these services."

Office 365 for enterprises comes in a wide range of configurations and is priced from $2 to $27 per user monthly. In addition to features like single sign-on and e-mail archiving, Microsoft is also bringing its high-end Office Professional Plus to the cloud: For $24 per user monthly, companies gain access to a cloud apps package that includes Outlook, Publisher, Access, Communicator, Infopath and Sharepoint Workspace (formerly known as Groove).

Microsoft had been selling BPOS, which includes Exchange, SharePoint, Office Communications Server and Office Live Meeting, for $10 per seat monthly, and the standalone Exchange Online offering for $5 per seat monthly.

At some point next year, Microsoft will add Dynamics CRM Online to Office 365, although no details were forthcoming at Tuesday's event. Microsoft also plans to transition its Live@edu cloud offering for the education market to Office 365, and will offer more details on the free and paid elements it contains at a later date, Capossela said at the event.

Although BPOS has been gaining momentum, Microsoft has been hit with outages in recent months that have irked some customers. In response to calls for more visibility into the performance and availability of Microsoft cloud apps, the company last month debuted its Online Service Health Dashboard, an online tool where customers can obtain up-to-date information on the status of BPOS apps as well as a 35-day status history of service performance and availability.

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Microsoft earlier this month acquired longtime partner AVIcode, a Baltimore-based company that specializes in performance monitoring technology for .NET applications, in a bid to keep better track of its cloud apps.

Capossela also noted that Microsoft has dedicated "tens of thousands of engineers" to supporting Office 365 and plans to continue investing heavily in cloud services. "Office 365 is the biggest commitment we've made to customers and partners," he said at the event.