Microsoft Office 365 – bought to you in Australia by Telstra T-Suite

Steve Hodgkinson, research director, Ovum

AUSTRALIA: This is an interesting development in the rapidly maturing cloud computing market – evidence that enterprise-grade vendors on both the supply side and the demand side of the industry are coming to grips with the opportunities and benefits of the new cloud computing model. Telstra have been on the front foot with the cloud, but so far in a pretty low key manner.

T-Suite was launched in 2008 with Microsoft as a founding partner providing productivity applications online. The early market experience seems to be paying off, with Telstra claiming this week that sales are now booming in T-Suite, growing over 200% in the past year – with over 50,000 services now sold via the portal. Microsoft’s online services have comprised around 70% of the services sold on T-Suite to date, so the launch of Office 365 today will clearly hit the spot in the SMB market.

Office 365 provides a full-function SaaS alternative to the on-premise versions of the Microsoft suite, though the entry level service bundle targets collaboration rather than online document creation and editing. $7.90 per user per month buys Exchange, Sharepoint and Lync collaboration functionality while adding Office Professional Plus functionality brings the monthly cost up to $40.10 – or $480 per user per year. 365 will operate on a range of mobile device operating systems via Office Web Apps.

We expect this alliance to grow and deepen over time. Telstra is a logical partner for Microsoft in the Australian market - bringing both its nationally ubiquitous sales and support channels to drive SMB adoption as well as the largest investment commitment of any vendor to cloud computing in this country. Telstra recently announced an investment of $800 million over five years in the further development of its infrastructure-as-a-service capabilities.

As adoption of cloud services grows it will become important for cloud vendors to be able to offer a hybrid mix of global and locally hosted cloud services to meet customer business and regulatory requirements. Global companies like Microsoft will need to develop strategic relationships with the market leading cloud providers in each country and the Telstra/Microsoft alliance seems to be going from strength to strength.