Office hasn't been just Word and Excel and PowerPoint for a long time. It's Exchange and SharePoint and Lync and Project and Dynamics, all now available as services in the cloud, as well as mobile apps that give you at least some of the features of desktop software.
There's an iPad version of Office in development, once Surface gets a touch version of Office next year. Plus there are new services like Power BI, with its impressive natural language interface for digging into your company information.
The way you get to all of that is Office 365, the subscription service, that so far, Microsoft is delighted with the popularity of the service with both businesses and consumers. "There are not a lot of examples of paid consumer subscriptions that have taken off really fast," points out Julia White.
Office 365 Home and Premium has 2 million subscribers already – and they're using the cloud features rather than just treating it as a way to get the desktop Office software. "People are getting the differences," White told us. "They're using the Skype minutes, they're taking advantage of the service parts of it."
Business subscriptions got a boost from the end of the fiscal year, a time when many enterprises buy IT services, which helped Office 365 be the fastest Microsoft business so far to reach its $1.5 billion run rate.
- Read our Office 2013 review
And that's not just the government wins she was expecting (she mentions the State of New York and the city of San Jose, noting it's "right in the heart of silicon valley" and so a prime target for Google Apps), but British Airways and "a really healthy number" of financial services companies; a much harder target to win over.
"You'd think those would be the last people to go because they have a lot of money, and they're very constrained by security and privacy. Government [sites] are so cash strapped I thought they have to [go cloud] but seeing so many financial services go to Office 365, I think that's a good indicator of general cloud adoption."
New features, more often
Office 365 adoption is also helping to sell subscriptions to the Office 2013 desktop software, as Office 365 Pro Pus. "They realize that if I don't have a client that's also staying current, then I'm not going to realize the benefits of having the latest server versions in Office 365. Before, we were lucky if people were on the latest version of the on-premise products. Now, it's all deployed it was meant to be. We used to ship people the pieces of the car and they had to build it themselves. Now we just give them the car."
Getting the latest version of Office 365 was a more drawn-out process than some users expected this year, because of the major architectural differences between Office 2010 and Office 2013.
White says that kind of delay is "a thing of the past" and new features will arrive more quickly. For example, it will only take a month to make Yammer integration in the Office 365 admin portal available to all Office 365 users.
"Up to this release, we were still on a path where the engineering team was planning and building an on premise release and then we would deploy that to cloud infrastructure. Now we have redone the way we organize our engineering team and also the cadence of engineering release cycles. We have blown up the old planning and engineering release cycle, the three year thing making big monolithic changes.
"There will never be any big platform level upgrade where it takes 18 months before people get the new stuff. For the cloud model that doesn't' work, now it's a constant steady cadence of stuff coming out. It's going to be more bite size chunks that come out, there's no big mega-release; everything from the new dirsync tools to the SkyDrive Pro storage increase to new Office mobile apps."
All these new features can't come at the expense of quality, but you have to think about that differently for a service. "In the old days, the on premise design principle of engineering and the measure of quality was mean time to failure; how long could your code run until it failed.
"The longer your code could run, the higher the quality. With a service it's very much about mean time to recovery. It's not about if something fails every year. It's if it takes you down for three days, it's a huge deal but if it if it fails every year and auto recovers in a nanosecond… that is a very different way to think about it, to engineer it, to measure your success. It's not so much about it never failing but that it has to be self-healing. That's been a big mental model change for the engineering team."
One Office 365
Office 365 has done its own mini version of the 'one Microsoft' reorg. "No longer is there a standalone Exchange, a standalone SharePoint and a standalone Lync team," White explains; "they are all integrated into an Office 365 team. So, there is a team focused exclusively on security, compliance, privacy across all things Office 365, thinking about it across the board instead of being very workload oriented."
Previous tools in Exchange couldn't assume you had SharePoint and Lync as well, let alone the latest versions, correctly deployed. That made it hard to create integrated experiences. "Now we can think about security compliance as a holistic thing and solve it in a unified way," White suggests. One area the team is tackling; groups.
"There are so many different ways we have tried to solve the groups problem. In email we have distribution groups and public folders, in SharePoint we have SharePoint groups, in Yammer we have Yammer groups, in Lync I can create my buddy list. They're all about having a set of people that you're doing work with and if you look across each individual product we have a half dozen ways we've solved that problem.
"But now with Office 365 and developing all together and knowing that they will all be deployed together and in the right way, you can say gosh, why isn't there a concept of just a group in office 365 and it can propagate anywhere and you don't have to recreate it."
Yammer is going to be much more integrated, not just in the Office 365 portal – which is happening already – but, in the longer term, into the way you work in Office tools. "Today, I have to go somewhere and go do social things. Moving forward it's going to be a horizontal technology that lights up in a bunch of different ways."
Forget the Facebook-style updates we're used to. "It's not about news feeds; it's about information being open and discoverable and accessible and that creates instant collaboration and discovery."
Take something we all know, like email. "There's so much info in my inbox that's probably incredibly useful to my coworkers across the globe but they will never find it because it's locked to my inbox. There are some things that do not belong in the public forum but this could be useful for someone else to find. We're thinking about how do we unlock more and more of that.
"Even simple things like; Why can't I like my email? Why can't I bring useful concepts between what are today different siloes of information in a more fluid approach?
- Now why not read How easy is it to migrate to Office 365?