Five years ago (June 28, 2011), Steve Ballmer launched Office 365 with much fanfare at an event in New York City. Microsoft needed to revamp its tired cloud offering because the much-maligned Business Productivity Online Services (BPOS) never met the required bar in terms of functionality, reliability, and performance.
Five years later, Office 365 is a huge success for Microsoft and is a core part of its plan to reach a $20 billion annualized revenue run rate by July 2018. Over 70 million active users connect to Office 365 each month and well over 200 million mailboxes are supported by Exchange Online. After a somewhat flaky start with two major outages in the first few months of operation, Office 365 has proven to be capable of delivering a quality of service that few on-premises IT departments are capable of matching.
Of course, BPOS couldn’t really be blamed for being so poor when compared to its successor. The software used by BPOS was originally designed for use by on-premises customers and didn’t have the scalability or automation required for cloud operations. Nevertheless, BPOS provided a valuable learning environment for Microsoft and helped them to understand the scope and amount of work necessary to transform the on-premises code base for Exchange, SharePoint, and Lync (now Skype for Business) into something that could provide a robust global service. In on-premises terms, that work occurred over four software generations (for instance, Exchange 2007 to Exchange 2016).
Today, Office 365 is the de facto target for new software innovation—so new features show up in the cloud first. However, some of the automation (such as the Exchange Managed Availability system) that makes it possible for Microsoft to manage the hundreds of thousands of servers that make up Office 365, end up being transferred back to on-premises versions, albeit not at the rate or quantity that many on-premises customers would like.
Exchange, SharePoint, and Skype for Business are the core workloads running inside Office 365. However, anyone who assumes that Office 365 is simply about cloud versions of these applications is missing the whole picture. Since 2011, Microsoft has gradually built out a new development fabric that allows engineers to build new and innovation functionality that will never appear on-premises. Part of the reason why is the hardware resources required to support some of the code that now runs inside Office 365, but the more important reason is the degree of integration that exists between different components inside Office 365 that is simply impossible to deliver to on-premises customers.
Among the major software advances over the five years are:
- The introduction of Delve in 2014 as the go-to portal for access to Office 365 resources. Delve depends on the Microsoft Graph, the glue that knits users and their actions together in a way that makes it possible for Office 365 to understand what users might want to do. Today, those recommendations turn up in places like “documents you might like to see” but tomorrow, a more developed version is likely to do much more to assist people in getting work done.
- Delve Analytics, introduced in December 2015, also uses the Microsoft Graph to provide personalized analysis of how users spend their time interacting with Office 365. Not everything is analyzed yet, but it soon will be.
- Office 365 Groups appeared in November 2014. Microsoft has had a lot of false starts with collaboration in functionality such as site mailboxes or SharePoint team sites. These are good enough in their own way but don’t take advantage of Office 365 in the way that Groups do to deliver real team-based collaboration by drawing on the best of Exchange and SharePoint. The power of Groups is also seen in integrations with Power BI and Dynamics CRM Online. More is coming with support for external access promised soon.
- Microsoft Planner, which achieved general availability in June 2016, adds to the team-based collaboration portfolio by providing a platform for teams (represented by Office 365 Groups) to come together to track common tasks. It’s not as powerful as the full-blown Microsoft Project, but who needs a Gantt chart when you just want to organize an event, collaborate on a month-long task, or develop a plan for a report?
- Office 365 Video is built on top of SharePoint Online and Azure Media Services to provide “internal YouTube” for Office 365 tenants. It’s an underappreciated and probably not well known part of Office 365 that can help companies solve communication and training needs.
- Yammer was bought by Microsoft in 2012 and subsequently integrated into Office 365. Yammer is great for some and unvalued (or undervalued) by many, but it is enterprise collaboration writ large that is exploited and valued by many companies around the world. All enterprise Office 365 tenants have access to Yammer and can use it as they wish.
The story of Office 365 is not just about the software. The huge investment made by Microsoft to deploy datacenters and other infrastructure around the world to serve global customers is indicative of their commitment to achieving success in the transition from on-premises products to cloud services. Datacenters now operate in twelve Office 365 regions, one of which (China) is not operated by Microsoft. Customers now have a real choice as to where their data resides and, in the case of Germany where Deutsche Telekom serves as the data manager, who looks after that data. Apart from the datacenters, Microsoft has deployed large numbers of network connection points to allow tenant traffic to be carried into their datacenter backbone as quickly as possible and allow users the confidence to connect to Office 365 with much the same performance from around the world (assuming a reasonable local connection).
There’s more too, like the FastTrack service to help customers migrate their data to Office 365 as quickly as possible. FastTrack came along late in the game and can’t handle complex migrations, but it serves a valuable purpose for many customers.
Life isn’t perfect and neither is Office 365. Change happens extraordinarily quickly within the service and it can be hard for tenants to keep track of what’s happening. Monitoring of the service is not as accurate as it should be. The ecosystem that surrounds Office 365 is not as broad and deep as the equivalent ecosystems that surround on-premises Exchange and SharePoint. This is partly due to the lack of API support that has been addressed recently through the release of the Microsoft Graph REST-based API with access to many different types of Office 365 data. However, some API gaps still exist, notably in the area of backup and restore.
Another reason for the weaker ecosystem is that ISVs have not yet identified as many niches to fill that exist for on-premises systems. The cloud delivers more functionality to users but is less flexible and open to ISVs and Microsoft takes care of many of the mundane system management operations that ISVs have smoothened and automated over the years. It’s also true that some ISVs are still stuck in the mode of thinking about how to develop products around a single application rather than taking advantage of all of Office 365, which is surely the way forward.
All in all, Office 365 has been a real success for Microsoft since its introduction. The financially-backed 99.9% SLA has only been called upon to pay refunds to customers a couple of times and the quarterly performance against SLA as reported by Microsoft is uniformly good. However, that being said, the sheer size of Office 365 now means that it takes a really big outage to make any impact on the quarterly SLA. Even so, it’s still true that the overall stability and robustness of the service far surpasses what many expected five years ago.
The next five years will be interesting. The migration from on-premises servers to the cloud continues and the majority of workloads such as Exchange, SharePoint, and Skype should be firmly in place within Office 365 by the time its tenth anniversary comes around. By that time, I hope to be concentrating on fine bottles of wine rather than writing about Office 365!
You can follow Tony Redmond on Twitter: @12Knocksinna.
Want to know more about how to manage Office 365? Find what you need to know in “Office 365 for IT Pros”, the most comprehensive eBook covering all aspects of Office 365. Available in PDF and EPUB formats (suitable for iBooks) or for Amazon Kindle.