Spend Matters welcomes another guest post from Jon Winsett of NPI, a spend management consultancy focused on eliminating overspending on IT, telecom and shipping.
In 2011, Microsoft debuted Office 365 to great fanfare. It appeared that, finally, the software giant was getting its feet wet in the cloud, and customers would get to enjoy the simplicity and cost efficiencies afforded by a SaaS delivery model. But fast forward to today, and things look a little different. Sales are slow, with Office 365 accounting for just 4 percent of Microsoft’s Business Division’s revenue.
As for simplicity and cost effectiveness, Microsoft seems to have missed the mark – especially for customers looking for a way to test out Office 365 without going “all in.”
Case in point #1: Recently, Microsoft began an Office 365 promotion which allows existing Office customers (perpetual license) to add Office 365 subscriptions on top of their existing enterprise agreements (EAs). While this allows businesses to easily add Office capabilities for certain users – something that’s next to impossible to do under perpetual license EAs – companies effectively pay twice for Office. They pay once for the perpetual license negotiated in their EA and again for the add-on Office 365 subscription fee.
Case in point #2: Microsoft is being intentionally, even audaciously, vague about Office 365 uptime status. Pay no mind to the fact that uptime is a top concern for companies considering a transition to SaaS and cloud-based services. If a company can’t access its data or email, the business impact can be severe. That’s why most SaaS vendors, like Salesforce.com and Google, allow anyone – paying customer or not – to see daily uptime status.
Microsoft does not. Earlier this month, Microsoft released this statement:
“The worldwide uptime number for Office 365 for the last four quarters beginning July 2012 and ending June 2013 has been 99.98%, 99.97%, 99.94% and 99.97% respectively. Going forward we will disclose uptime numbers on a quarterly basis on the Office 365 Trust Center.”
Microsoft’s approach here is nothing short of alarming. While other major SaaS vendors provide daily uptime status to anyone who wants to see it, Microsoft only provides this information quarterly to paying customers. If you’re a CIO thinking about moving to Office 365 and want to have a look at uptime for yourself – you’re out of luck (unless you ask a biased Microsoft sales rep, which kind of defeats the purpose).
Barb Darrow, a reporter who closely follows Microsoft over at GigaOm shared her frustration:
“Sorry, this does not even come close to being acceptable. Or even useful. If you happen to be an Office 365 customer you can see system status, but for John Q. Public who just wants to see what’s going on? Nuh-uh.”
Even Office 365 customers are expressing their displeasure as evidenced by this tweet posted in Darrow’s article:
“This is all great stuff, and I find O365 to have fantastic uptime. That said, please, please, PLEASE follow the trend of every other major cloud player by making your status available PUBLICLY. Examples include trust.salesforce.com, status.aws.amazon.com, http://www.google.com/appsstatus, and so on. EVERYBODY else does this – it really looks shady the way you don’t."
The takeaways are these: Microsoft’s biggest roadblocks to Office 365’s success are lack of transparency and contractual simplicity. Until they embrace these attributes, enterprise customers will stick with what they know – perpetual licensing. Or, worse, try a new vendor on for size.