Microsoft Office 365

  • Category: Internet Services
  • Review Date: 07/1/11
  • Bottom line:

    Office 365 could mark the beginning of the end for traditional, on-premise Windows server administrators. With Exchange, SharePoint, Office and the unified communications service Lync all in the cloud, managing a Windows environment has never been easier or more centralized.

  • Pros:

    Provides cloud-based Exchange 2010, Sharepoint 2010 and Lync 2010 Servers . Gives end-users Office Web Apps with additional Office Professional Plus 2010 desktop integration. Rich Outlook Web App client. Excellent Exchange administration capabilities. Integrates with existing Active Directory environments. Lync provides comprehensive communications. Big cost-savings potential.

  • Cons:

    Lots of screens to navigate. Admin management screens and workflow could be better organized. SharePoint offline file synching quirky. Needs more robust mobile integration. Microsoft needs to keep pricing models and SKUs simple and easy to understand.

Editor Rating:


By Samara Lynn

Microsoft's hosted collaboration and productivity suite is officially out of beta and was formally launched on June 28. Some changes and improvements have been made, mainly surrounding scalability, and the resulting version of Office 365 has a lot of potential but its features still need honing. As I found with Windows Intune, Microsoft's cloud-based PC management service, there are a lot of screens and settings to navigate—too many. While the workflow is intuitive for specific tasks—such as setting up Exchange or SharePoint Online, managing email administrator tasks, or setting up domains—getting to those tasks, requires sifting through numerous administrative screens. I received some mysterious error messages with some tasks and still found issues using SharePoint's Team Sites. However, hosted Lync Server 2010 and Exchange online are excellent offerings and overall, Office 365 makes for killer collaboration and has an unparalleled feature set, especially with integrated Office Professional Plus 2010.

Some tech pundits insist on referring to Microsoft's Office 365, as Microsoft's business-centric "answer" to Google's online services. I respectfully disagree. Yes, Microsoft is playing catch-up in the cloud services space with Office 365. However, to suggest that Office 365 is an answer to Google Apps is to imply that Google's services are somehow in a league with Office 365. Office 365 is far more than simply a Web version of Office 2010. Office 365 is a service comprised of cloud-based versions of Microsoft's four front-running business products. Of course, that does include Microsoft Office. But it also bundles in Exchange (the widely-used email platform), Sharepoint (a platform for document sharing and collaboration) and Lync (a service that provides IM, video conferencing, PC phone calling and some enterprise social networking) all delivered through an interface that will make IT admins happy, thanks to the granular level of control that can be imposed on a business, regardless of size.

With a 99.9% uptime guarantee, reasonable pricing, and the power of Exchange, Lync, SharePoint and Office 2010, Office 365 is a promising solution for Windows-based businesses. End-users have access to Office 2010 document editing via the cloud or through the included, locally installed, Office 2010 Professional Plus client, at $24 per user per month. This is also the way to go if you're worried about your ability to function should your Internet connection go down. This is a cloud service, after all—without Internet access, it doesn't function, otherwise. Small businesses can save money by going completely "online" with only Office Web Apps (from six dollars per user per month) and opt to not use the local office 2010 client. Either way, end-users also have access to a rich web-based Outlook client that retains many of the feature of the desktop Outlook. Access to SharePoint sites for collaboration and Lync also provide users with a true, converged communications and collaboration experience.

Google Apps, while very useful in a stripped-down way, simply can't deliver the very granular administration side that Office 365 provides. Most businesses still have Windows environments and, unless they have very light productivity and collaboration needs, or operate mostly on-line, it makes far more sense (in terms of migration path and integration) for them to move to a hosted Microsoft platform than to Google Apps. Google's applications are also not nearly as feature-packed—it was only recently that Google Docs got the pagination capability!

Depending upon an organization's needs, Office 365 prices range from $6-$24 per user per month. Savings are obvious if you compare this monthly fee to the cost of hiring resources to build a unified communications system and manage and maintain local servers running Exchange and SharePoint. Plans scale from SMB to enterprise. Larger organizations with Windows networks can transfer Active Directory and domain information into Office 365.

Microsoft faces another challenge with its shift from traditional on-premise offerings to cloud-based services: although putting Exchange, SharePoint and other business-productivity products online eases administration management, it's still not easy enough. To get the "full" experience users still need a copy of Office 2010 Professional locally installed.

Administering Office 365, especially the Exchange and SharePoint components, still assumes a certain level of knowledge about Windows domains and system administration; it's not yet an "anyone can jump in and get started" offering, at least with an enterprise subscription.

There are two interfaces in Office 365: one for administrators and one for clients. For administrators logging into the service, there's a handy checklist of tasks to which they should first attend.

Upon first logging into the service, admins can set up users and assign roles to those users, such as Billing Administrator, Global Admin, or Password admin. Users can be added in bulk via a .CSV file—the system provides a sample file to download to ensure that the .CSV file is properly formatted.

Also supported is Active Directory synchronization with single user sign-on. This allows identity federation, which supports Active Directory users. Users can also access the Office 365 service using on-premise credentials.

During the sign-up process a domain is created for your account. The domain is fully functional, supports email, and can be used to create SharePoint sites and public websites. If your organization already has a registered domain, you can re-delegate that domain so it can be used in Office 365.

Users are assigned licenses. The setup in my demo was a choice of assigning users to the Microsoft Office 365 Plan E3—which includes licenses for Office Professional Plus, Lync Online, Office Web Apps, SharePoint Online, and Exchange Online—or the Microsoft Office 365 Plan K2—which includes Office Web Apps, SharePoint Online Kiosk, and Exchange Online Kiosk.

There are three main tasks with which Administrators may begin: adding users, viewing the setup overview page, and creating a custom pilot or deployment plan. You can test Office 365 with a pilot plan or move your company to the system using a deployment plan.

I selected a custom deployment plan and selected the services included in my subscription (Exchange Online, SharePoint Online, Lync Online and Microsoft Office Professional Plus). With the setup wizard you can either choose that you don't have e-mail and don't want to use your existing environment—applicable to SMB, perhaps—or customize integration with your existing Exchange environment, hosted mail, or Internet mail.

As mentioned, administrators have the capability to manually add users or bulk-upload via file or Active Directory sync. The single sign-on model for users means administrators who want to retain a local Active Directory server only need to manage one set of credentials. Office 365 also supports hybrid sign on: Users can sign in by means of Active Directory (to log in on-premise) or Microsoft Online Services ID (to access Office 365). The Microsoft Online Services ID is ideal for small businesses that don't want to add steps to setup or change anything on premise—this is the option I selected for testing.

Microsoft has done a good job on the initial admin workflow. Once you've finished setting up the preliminaries, Office 365 sends you to page that contains a check-list of tasks including notifying users, adding a registered domain, creating mailboxes, and activating users. If you leave the task area of the interface to explore another area, just click the "Custom Plan" link on the Admin screen and you'll return to your tasks. There's even a drop-down list next to each task so you can associate a status. Other tasks include setting up SharePoint or Exchange online, deploying Office Professional Plus, switching your primary email environment, redirecting email to Exchange on-line, updating user desktops, or opening Exchange online.

Exchange administrators will appreciate that Office 365 supports the migration of local Exchange email boxes to Office 365, depending upon the size of the mailboxes and the email environment.

Office Professional Plus 2010
To get the full experience of Office 2010, Microsoft recommends having local Office 2010 installed, as it is designed to work seamlessly with Office 2010. And it does. For instance, once you have Office 2010 Professional Plus and Office 365, you can opt to have a shortcut added to the Office app ribbons to post documents to a SharePoint library.

Depending upon the subscription, Office 365 comes with an upgrade for each user to Office 2010 Professional Plus. It's easy to deploy the software from Office 365. I went to my home page and clicked the link, "Setup your computer to work with Microsoft Office 365." You download and install the application. If you already have Microsoft Office on your machine then it's not a fresh install but rather an upgrade to Professional Plus. Office Professional Plus can be installed in several different languages or as either 32- or 64- bit. As previously noted, the installation process feels a bit bloated. While Microsoft's documentation states that it isn't necessary to deploy Office Professional Plus 2010, it also doesn't specify what functionality users will lose if they don't. A side-by-side list for administrators within the interface outlining what you can do with and without Professional Plus would be nice. After installing Professional Plus I noticed that I could edit documents either through the browser via Share Point Team Site or by opening them in the locally-associated Office program.

If you opt for a basic subscription without Office Professional Plus, you get a Microsoft Word Starter 2010, Excel Starter 2010, Upload Center, Picture Manager and Microsoft Office Starter To-Go Device. Starter-To-Go copied the Office Starter programs on a USB flash drive. Upload Center manages your Office file uploads to web servers.

Starter Word does not support advanced functionality such as a table to contents, tracked changes and document protection. Starter Excel display advertising (which looks kind of odd in an Excel spreadsheet) and does not support advanced features.

Exchange Online and Outlook
For the IT admin in me, the highlight of Office 365 is Exchange Online and the richest Outlook Web client ever. Administrators can granularly manage an online Exchange server. Online management options are almost as robust as those of a local Exchange server. Administrators can manage mailboxes (by setting usage limits), archiving, MailTips, phone and voice integration, and other Exchange tasks such as setting up distribution groups and adding external contacts to an organization's address book.

Admins can also add users to role groups. These groups include Discovery Management, through which members may search mailboxes for specific criteria—a legal compliance team, for instance. The Help Desk role allows members to view and manage the individual configurations, view recipients in an Exchange organization, reset passwords, and adjust user options. There's even Records Management. Unlike other cloud services such as Gmail, Exchange Online provides detailed management controls that enable businesses to customize webmail options to their needs.

In addition to the nine pre-defined roles, administrators can create new roles or 23 other roles to existing roles. For instance, you can grant members in the Discovery Management role access to a Journaling Role or make Journaling a role of its own.

Exchange Online offers several auditing reports and server-side mail rules. You are also given the option to add Forefront online protection for Exchange. It supports IP safelisting, perimeter message tracking, and email policies. From within Exchange, you can configure unified messaging capabilities such as defining the format for telephone numbers in an organization.

I am hard-pressed to find any major capability from the Outlook 2010 that is unavailable in the Web app. Exchange online includes the same functionality a fantastic user interface, and plenty of user-level control over mailboxes.

Lync is a relatively new Unified Communications client that provides IM, presence, and online meetings and it also gives Office 365 users voice and video conferencing. While it is not really a web service as it runs as desktop software, Lync does have extensive Outlook integration. This includes single-click meeting scheduling, a feature from Communicator Mobile. Lync Server 2010 also provides a feature similar to traditional audio-bridge services, including PSTN dial-in with touch-tone call commands. Since the beta, Microsoft has released the Lync Power Pack which adds six new applications to Lync—Conversations Analyzer, Conversation Translator, Information Dashboard, Tabbed Conversations, IM an Expert and Group Chat Stress Tool. I tested Analyzer, Translator, Dashboard and Tabbed Conversation with all working well expect for the Analyzer which has a lot of potential but needs work.

Conversations Translator will translate your IM text so you can message someone in another language. I tested it with a native Russian speaker who confirmed that the translation from English to Russian worked almost perfectly. This is really impressive because since English and Russian languages use different character sets, automatic translation from one to the other is difficult. I do admit though, we tested using some fairly straight-forward sentence.

Conversational Analyzer has the potential to be an amazing tool. It will query against all of a user's IMs and emails in a specified amount time looking for "positive" words and phrases such as, "thanks" and "nice job" as well as "negative" words like "sucks" or "terrible." It then calculates what is referred to as a Trust Index. Companies can also customize which words or phrased to search against. I'm not sure what the exact purpose of Analyzer is, maybe for marketing, but I can imagine organizations using it for compliance reason to ensure sensitive company information isn't being discussed by and with the wrong parties.

The problem with Analyzer is that I couldn't get it to work. It runs on the same computer a user runs the Lync client. It has to be configured with the proper credentials and Exchange server information, whether that server is hosted or on-premise. I thought I had all the right information, but when I tried to load the messages to analyze, I kept receiving an unhandled exception error message. I wish Microsoft would consider a "Test" button to ensure proper communications with the Exchange server and some re remediation suggestions, because it would help with the configuration. This is a tool that definitely seems to need work.

The Information Dashboard is more of a "nice to have" rather than really needed add-on. With it, I was able to type in the geographic location of one of my Lync contacts and the Dashboard displayed the current time, weather, news and traditional business hours of that locations. Of course, you can get all that with an Internet search, but it's still a handy feature.

Tabbed Conversations also works well. You use it to view multiple IM conversations in a single window.

I didn't test the remaining features, but I'll give a quick rundown on them: IM an Expert helps people in an organization ask questions and find experts within their company; Group Chat Stress Tool is used for diagnostics and monitoring the server load with group chatting in large organizations with lots of users.

Video conferencing is one of the more powerful features. Lync 2010 can display a 360-degree video panorama of a meeting room or location (provided you have cameras that support this feature). When there are multiple participants in a video or Web conference, Lync 2010 detects the active speaker and displays that person in the video windows. Conferencing supports high –definition video and VGA video. Meeting features include white boarding and desktop and application sharing. Users can also record meetings.

SharePoint Online
Administrators can setup SharePoint sites for use within an organization or for publically posting documents, blogs, forum discussions, and more.

You can build a site from several templates. There are templates for sharing information and creating document libraries, lists, calendars, and meeting workspaces. SharePoint online can also interface with Microsoft's InfoPath Forms Services, which allows people to fill out forms via the web, and setup public or private sites. Not every organization using Office 365 may need SharePoint, but for collaboration-heavy businesses it's a good way to share content—plus Microsoft gives a generous 20 GB storage limit.

On the administration side, I didn't find SharePoint online management as well organized as that of the Office 365 version of Exchange. As an Exchange admin, I found it easier to flip back and forth from Outlook to Exchange management screens due to links in the Outlook interface. I didn't find that ease as a SharePoint admin: I had to log out of my the SharePoint management page whenever I changed a setting and then log back into Office 365. This even after the admin page open in another window.

SharePoint Team Sites are how users can share and collaborate on documents. It's great to for managing your documents into document libraries and then granting permissions to other users you want to share or co-author with. Documents on a Team Site are edited with Office Web Apps. You can't so advanced editing tasks though, such as creating or editing charts in Excel.

I ran into an issue with co-authoring a Word document. I tested with two different users on two separate machines. I wanted them to open up an edit the same document at the same time, isn't that the point of co-authoring? When I had one user with the document opened and edited, the second user kept receiving an error trying to open the same file for editing, "Word Web App cannot open this document for editing because it is currently being edited by another user."

I checked to ensure that the pre-requisites for co-authoring were set for my site and my document library; granting the second author full rights, ensuring Require Check Out was disabled—which prevent opened documents from being edited, and enabling versioning.

Everything checked out OK. It wasn't until I ran the same test on an Excel spreadsheet with two sheets of data that I could have two different users co-authour. It look as if users can co-author documents that have different sections.

I had a bigger issue with synchronization. To synchronize files between your Team Site and your local machine you need to use SharePoint WorkSpace 2010 which is available in Office Professional Plus. Users configure Workspace by entering name, email address associated with the Office 365 account and the Workspace then synch with the Team Site. I saw all the files on my hosted SharePoint Team Site in Workspaces.

I made a change to file I had both locally and on Team Site. I made a change locally and then tried synching it to Team Site which WorkSpaces does via upload. I got a vexing message that "Update failed, sign in required." I had to sign back into Office 365! I thought that was the whole point of WorkSpace to do the syncing so you didn't have to sign into Office 365.

I gave it try however and after successfully authenticating, I received the same error again, "sign in required". The sync process was one big, circuitous fail. Offline file synchronization is an important feature and it needs to work better.

Office Holds Promise
I'm generally impressed with Office 365 (particularly Lync and Exchange) having worked with it since the beta release. Microsoft should continue to fine-tune this cloud service, though. The key to Office 365's promise is Microsoft's integration of information and workflow. Contacts in Outlook flow into Lync. Documents edited in Office can be collaborated on via SharePoint.

But there's still room for improvement. SharePoint administration needs to be as intuitive and well organized as that of Exchange. Offline file sync seems as if it's broken. Office 365 could also benefit from better documentation: I would like to see exactly why I still need the Office desktop client. If I can do so much in the Outlook Web App, why shouldn't I have the same extensive feature set in the other web apps?

Office 365 needs better mobile integration. For instance, the Mobile Phone Setup Wizard isn't an automated setup process. It doesn't automatically connect your phone to Office 365; rather it provides guidance after you've selected your carrier and phone type. It's also inexcusable that Microsoft doesn't offer better integration with Hotmail. I exported my contacts from Hotmail to Office 365 Outlook but ultimately had to export my e-mail as a .CSV file to import it into Office 365. Also, I find it odd that when you want to add members of Microsoft's own Windows Live Messenger as Lync contacts you get the message that enabling messaging for Live Messenger uses could take up to a day.

These specific complaints aside, Microsoft has taken a step in the right direction. Office 365 delivers Microsoft's most widely used software as cloud services and makes it as feature-rich in the cloud as locally installed versions. I am particularly impressed with Exchange online. It may be the most customizable and polished e-mail web service available.

I hesitate to call Office 365 a "final" release because no doubt there will be updates and enhancements. With a free 30 days to test for anyone, it's definitely worth it for small-to-mid sized businesses running or interested in running Windows apps to take it for a test drive.

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This review is in partnership with Ziff Davis Media.