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On Monday, Microsoft opened Office 365 -- a cloud-based version of its productivity apps -- to the public for beta testing. The beta version contains Microsoft Office, SharePoint Online, Exchange Online and Lync Online. The trial is available in 38 countries and 17 languages.

The Office 365 suite is billed as an always up-to-date cloud service. The beta comes in two editions, one for small businesses and one for enterprises.

Microsoft wants to simplify connectivity and collaboration for employees. Office 365 features include document creation and sharing, email, IM, online meetings and public websites. Microsoft includes protection by its ForeFront security client and promises 99.9 percent uptime.

The new offering can be accessed from virtually anywhere, according to Microsoft. Information is stored on the cloud, so Office 365's tools are not tied to a specific PC or device.

Microsoft will offer different subscription plans for Office 365. For small businesses with fewer than 25 employees, the price is US$6 per user per month. For larger companies, an Office 2010 Professional Plus subscription with additional suite components will be $24 per person per month.

Microsoft also debuted an Office 365 app store with 100 apps and 400 professional services available from Microsoft's 16,000 cloud partners.

Microsoft did not respond to TechNewsWorld's request for comments by press time.

Late to the Game

In an attempt to counter the growing number of cloud-based applications on the market, Microsoft may be dressing up existing products to look new. If the price is right, though, that may be enough.

"Microsoft desperately needs a comprehensive cloud-based strategy to fend off competition from Google and other cloud-based vendors. Office 365 is trying to fill that gap," Azita Arvani, principal of the Arvani Group, told TechNewsWorld. "Structurally speaking, Office 365 seems to include a decent set of components, including Exchange, Office Web apps, SharePoint, IM and Web conferencing. The reported pricing seems to be competitive too."

There are hurdles for Microsoft's cloud offering to clear. For one, Google Apps have been in use for ages, in technology terms.

"The biggest challenge is timing. Office 365 is something that Microsoft should have had a few years ago," said Arvani. "Google Apps has been a product for a while now. Yet, Office 365 is still not released yet. It has just entered the public beta."

Also, Microsoft could have difficulty positioning Office 365 against its own Business Productivity Online Standard Suite.

"On the performance side, it will be interesting to see how Office Web apps can perform in the cloud version. The original Office apps are designed for desktop usage," said Arvani.

Upgrade or New Product?

While the new name "365" and the beta testing suggest Microsoft has introduced an entirely new product, it may in reality be no more than a simple cloud-based upgrade of existing products.

"The name is a bit deceptive --it's really an upgrade for the Business Productivity Online Standard Suite with some cloud functions, even if it may hook into Office," technology project manager and Geek 2.0 blogger Steven Savage told TechNewsWorld. "I'm positive a cloud-based Office offering may come, but this isn't it."

Microsoft so far seems to be embarking on a mixed strategy: a general move to the cloud, while expanding it's productivity and collaboration offerings.

"This is more targeting wikis, Atlassian, and Salesforce.com than anything else -- and even then that's stretching it a bit with this offering," said Savage.

Microsoft 365 is more of an evolution than a revolution, in his view. "Microsoft sees the future as cloud and cloud services, and is moving there -- but it's not a direct assault on any cloud provider or collaboration provider. Not yet. It could be in time."

Before being convinced that Microsoft is serious about cloud offerings, Savage wants to see a full Microsoft Office option.

"When that happens, pay attention, because then Microsoft will be making a major move towards the cloud for everyone," he said. "They're just not there yet."