Office 365 offers value, but it’s not Office

Woody leonhard By Woody Leonhard

Trick question: when is Office not Office? When it’s Office 365, of course.

On Monday, Microsoft revealed its latest beta version of Office 365. For some small businesses — even some individuals — it may be worth the price.

The first thing you have to understand about Office 365 (info page) is that it isn’t Office. In spite of the name, Office 365 isn’t a new version of Office at all. It’s a rebranding of server services Microsoft has offered for years, with a bit more sizzle and a different marketing slant (and presumably a much larger marketing budget).

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Microsoft could have explained the product much more accurately by calling it “Exchange-SharePoint-Lync for Rent” and by emphasizing that you don’t need to run Exchange, SharePoint, or Lync on your own hardware. You can rent time on Microsoft’s servers, and MS will do all the heavy lifting over the Internet.

Deconstructing Office 365 and its components

Unlike Windows Azure, which targets a very techy crowd, Office 365 reaches for the masses. You don’t need a degree in computer science, much less a Ph.D. in Windows Server, to get Office 365 up and running for yourself or for your organization. If you’ve ever wished that you or your company could run Exchange Server, SharePoint Server, or Lync — but you balked because you didn’t want to go to the considerable hassle of running your own server or hiring a consultant to set up Windows Small Business Server — this is your chance.

In the World According to Office 365, Microsoft runs the servers, and you and your organization attach to them over the Internet. Microsoft also provides more-or-less foolproof, dumbed-down front-end software, so you can make Exchange/SharePoint/Lync work more in the way you want them to — sort of. Microsoft also provides online and phone support for when you inevitably shoot yourself in the foot.

You pay for the service on a per-user, by-the-month basis.

But where, I hear you ask, does Office enter into the picture?

An excellent question. You’re going to want Office 2007 or 2010 so that you can take advantage of all the neat stuff in Exchange-SharePoint-Lync. If you already own Office 2007 or 2010; and you’re running Windows XP SP 3, Vista, Windows 7, or Mac OS X (Leopard or Snow Leopard); and you use one of the major browsers, you have everything you need to run Office 365. If you don’t have that software, you can rent Office 2010 (per user, by the month).

Office 365 is an upgrade of the Business Productivity Online Standard Suite — BPOS — that Microsoft has offered for years. What? You’ve never heard of BPOS? You aren’t alone. That’s why Microsoft stuck the “Office” name on the package.

Office 365 starts at U.S. $6 per user/per month if you already own Office 2007 or 2010, and it goes up to $24 per user/per month for large organizations that want to license Office at the same time. Details are in the Office 365 Fact Sheet (Word doc).

What you can do better with Office 365

Lots of reviews and Microsoft’s voluminous beta-testing kits tell you all about Office 365’s features. Instead of repeating Microsoft’s marketing material, I prefer to explain why a solo Office user — or small business with fewer than 25 Office seats — might want to pay for Office 365.

The biggest benefit for most people is access to Outlook over a mobile phone or iPad (er, tablet). Yes, you can get e-mail over your phone right now, but with Office 365 you can dig into all of your Outlook stuff directly. If you send a message on your phone, for example, it shows up in the Sent Items folder on your phone, your PC, or your iPad. If you use rules to move mail on your PC, those same rules run when you access mail on your phone. If you move messages into specific folders on your Mac, they appear in those same folders on your iPad.

That’s the magic of Exchange Server, and it’s all included in Office 365. It isn’t just e-mail: all your contacts appear identically on your PC, Mac, iPhone, iPad, Android, or BlackBerry. Calendar entries, flags — the whole nine yards. The mechanics vary a bit depending on which device you’re using, but Exchange holds your data, and you get at it directly in Outlook or via the Web using the Outlook Web App.

I figure that’s the top feature for most Office 365 converts. There’s much more, of course.

You can use SharePoint to store files on the Web and control access to them. Although Dropbox does most of what most people need for sharing files, SharePoint has several additional features — including much more granular access restrictions and support for having more than one person simultaneously editing Word docs, Excel spreadsheets, or PowerPoint presentations. By storing data in a SharePoint team space, you can get at the data using one of the Office Web Apps, which are accessible to mobile phones and tablets (thus letting you edit a Word doc on your iPhone, if you feel so inclined).

Lync supports audio and visual conferencing with shared whiteboard and documents. But so do many other programs. Lync has the unique ability to hook directly into Outlook 2010 and update you on a person’s status. For example, if you receive an e-mail from Steve Ballmer, Lync tells you whether Steve is online and thus able to take your IM call. Or maybe not.

Taking Office 365 for a quick test drive

If any of this sounds appealing to you — or you just want to see what your friends in big companies have been up to all these years — by all means, take Microsoft up on its offer for a test drive. To join the beta for the Plan P1 version of Office 365 (for organizations with 1 to 25 seats), go to the “Join the Office 365 beta” website and sign up. You’ll be accepted immediately.

A couple of words of warning, however:

Don’t accept the invitation (if it appears) to upgrade your copy of Office to Office 2010 Professional Plus unless you’re willing to uninstall the upgrade at the end of its 30-day trial period and reinstall your current version. (Yes, the beta installs a 30-day trial version of the software.) Office 2010 Professional Plus is available only for volume license or as part of Office 365. If you upgrade but at the end of 30 days decide you don’t want Office 365, you have to manually go back to your old version.

Don’t use Office 365 on any critical documents. Yes, you’re working with the real, shipping version of Office, so that part shouldn’t cause any heartburn. But the cloud pieces are still officially in beta, and that means they could fail. The last thing you want is to put your only copy of your company’s annual report through an Office Web App that accidentally gobbles the formatting.

Microsoft’s beta is a full-court-press tour of Office 365’s capabilities and attractions. If, at the end of the 30-day trial, you don’t like it, you’ll know before it officially ships.

When will it officially go out of beta? Hard to say — with a cloud service, the line between beta and shipping code is murky at best. The Office 365 beta isn’t so much a beta test version as a 30-day trial version. lf you want to continue beyond the 30 days, you should be ready to pay the piper.

Feedback welcome: Have a question or comment about this story? Post your thoughts, praise, or constructive criticisms in the WS Columns forum.

Woody Leonhard‘s latest books — Windows 7 All-In-One For Dummies and Green Home Computing For Dummies — deliver the straight story in a way that won’t put you to sleep.

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Woody Leonhard

About Woody Leonhard

Woody Leonhard is a Windows Secrets senior editor and a senior contributing editor at InfoWorld. His latest book, the comprehensive 1,080-page Windows 8 All-In-One For Dummies, delves into all the Win8 nooks and crannies. His many writings tell it like it is — whether Microsoft likes it or not.