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February 15, 2006

Office Live a threat to Small Business Server

Posted 2991 days ago on February 15, 2006

Microsoft is keen to emphasize that Office Live is not a hosted version of Office. Instead, it's an instant web site and intranet for small businesses. You get a wizard-driven web site for your own domain name, online email, calendar, contact management and project management. There is a relationship with Office, especially with things like Sharepoint-driven document collaboration. It's also a platform for 3rd party applications to handle areas like accounts and payroll.

Oddly enough, everything I've written above is also true of Small Business Server, a one-box suite which includes Windows Server 2003, Exchange, IIS and Sharepoint. SBS is hugely popular, and gets installed almost by default in small businesses when they realize they need a server and not just an ad-hoc network.

SBS is also a disaster zone. The product itself is excellent, but all too often there is nobody in-house who knows how to manage it, or even how to leave it alone. Problems build up, and sometimes even the Microsoft Partner who installed it lacks a deep knowledge of how to maintain it. It's understandable: this is one box containing several of Microsoft's most complex products. The user-friendly management tools are great, but they don't solve every problem and it can all go badly wrong.

A hosted, internet-accessible service is the answer. But what is Microsoft's strategy here? I've heard it suggested that Office Live is the entry point, and SBS the upgrade path. That's madness, since it would also be a step backwards. Small businessses want to escape from the sulky box in the corner.

Some businesses may not want to trust Microsoft with their data. I don't want to belittle this point, but it needs to be put alongside the risk of someone hacking into your internal system and grabbing your data. The more services you publish with Small Business Server or the like, the more vulnerable you become. I doubt Office Live will be less secure.

I don't know the details of Office Live yet, and of course other vendors will want to occupy this space. In principle though, it's an attractive option for the SBS crowd. Scalability is the key issue. Microsoft has to work on scaling up Office Live, so that the service will grow with your business, and not expect users to retreat back to the beige box in the cupboard. Instead, it will be tempted to put a ceiling on Office Live to protect its server business. This must be what competitors will hope for.

If Microsoft gets it right (big if), then this will be costly for the SBS business and for those who install it. However it is the right thing to do. The potential benefit to Microsoft of hooking users into its online platform far exceeds any lost sales.

Update

Sadly it looks like SBS is safe for now - see my later post

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