Microsoft's Office 365 Home a Cloud Catalyst

Microsoft unleashes Office 365 Home Premium to the consumer market, giving users access to Outlook, Word, Excel, PowerPoint, Skype and Skydrive on up to five devices for $99 a year. With more competitive pricing for students, Microsoft may be looking to create consumer demand that catalyzes the business world. Success is critical, as Office may be Microsoft's last shining star.

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Office365Microsoft Corp. has unleashed Office 365 Home Premium, bringing the traditional Office suite -- Outlook, Word, Excel, PowerPoint and OneNote, Publisher and Access  -- plus 20 GB of SkyDrive storage and 60 minutes of Skype-out calling per month. The whole package kicks off at $99 a year, with a Office 365 University version that includes the same for only $79 over four years.

It's a powerful package, indeed, and Microsoft is banking its future on it. In a prepared statement,  Microsoft CEO Steve Ballmer said this is the "next big step in Microsoft's transformation to a devices and services business." Microsoft will deliver features and services to their cloud software first, offsetting the "traditional three-year release cycle." Subscribers will be the most valued customers.

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Office 365 Home Premium is accessible on up to 5 devices, including mobile, and includes a specialized "Office on Demand" feature for any PC connected to the Internet. A 30-day free trial is available.

Microsoft flanks this with an update to software -- Office Home and Student 2013, Office Home and Business 2013 and Office Professional 2013 have all been released -- but it's clear this is no longer Microsoft's primary focus. Kurt DelBene, president of Microsoft's Office division, said, "Peoples' needs change rapidly, and Office 365 Home Premium will change with them"; naturally, the cloud is the best way to make that happen.

Although the channel won't feel the implications of Office 365 Home Premium, the package will reshape the expectations that users have in the workplace. With a continued adoption of cloud software by consumers, a "consumerization" uptick in the trust and adoption of cloud services will overflow into the channel. If a growing portion of the workforce relies on cloud apps at home, C-level executives and in-house IT staff may do so, which is likely to break down any remaining barriers to using cloud services. Solution providers delivering Office 365 for the workplace can now lead with a product that is familiar and requires almost no learning curve.

Although Microsoft has ramped up plans for its cloud solution providers, Microsoft has made Office 365 somewhat channel-unfriendly, holding on to the billing relationship and providing referral margins. Microsoft has promised direct billing and open licenses for Office 365 by the end of April -- possibly part of this larger roll out of Office 365 Home; Office 365 Small Business and Enterprise won't see major updates until Feb. 27, according to Microsoft's release.

In truth, Microsoft's primary strategy with Office 365 Home is to generate support for the software on platforms not traditionally held by Microsoft. Office 365 will run on Macs and be accessible via tablets, iPad or otherwise. That decoupling of software from the operating system is critical for Microsoft to maintain its  relevancy during a time of heavy competition from Google Apps and other powerful cloud productivity suites.

With Windows 8's success still questionable at best, Office remains one of Microsoft's most powerful and well recognized products -- to lose that market share and mind share would be devastating for the Redmond-based software company.

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