Basic, premium versions differ in services, cost; Q&A; Office 365.(Business)

Byline: Sharon Pian Chan; Seattle Times technology reporter

Here's an FAQ on Microsoft's new cloud software, Office 365, and the competition with Google.

Q: What is Office 365?

A: It's a package of Microsoft Web software and services. The basic one includes Web versions of Outlook email, SharePoint collaboration software, Lync instant messaging, Word, Excel, PowerPoint, OneNote and a public website builder.

A more expensive version has all of the above, plus a regular version of Office 2010 you can install on your computer.

Q: How do I use Office 365?

A: If you have the basic package, you use the email program, SharePoint, Word, Excel, PowerPoint and OneNote through a Web browser. Lync gets installed on your computer.

If you subscribe to a premium version, you get a copy of Office 2010 to install on your desktop or laptop computer, and you have the option of connecting to your documents and email through a Web browser when you're not at that computer.

With any package, you can access your Office 365 email and calendaring with an iPhone, Android phone, BlackBerry or Windows Phone.

If you don't have an Office 365 subscription, you can still use Office Web Apps, free Web versions of Word, Excel and PowerPoint that Microsoft introduced last year.

Q: How is any of this different from what Google offers?

A: Google has Google Docs, which are free Web applications for word processing, spreadsheets and presentations. Google Docs competes with Microsoft's Office Web Apps.

Google also has Google Apps, which consists of Google Docs plus email and collaboration software. Google sells Google Apps to businesses that have more than 10 workers. It charges $50 a year per worker.

Q: How much does Office 365 cost?

A: The basic version of Office 365 costs $6 per user per month.

Other pricing ranges from $2 to $27 per user per month depending on the version and how many workers are using it at a company.

A single copy of Office 2010 costs $150 to $500, depending on the version.

Q: Is Office 365 the same as Office 2010?

A: The basic Office 365 subscription is a pure cloud service, which means users need to be connected to the Internet to use any of the applications in the program. The basic version does not have all the features of Word, Excel, PowerPoint and OneNote that come in Office 2010.

With the premium version of Office 365, you get a copy of Office 2010 to install on your desktop and it can be used without an Internet connection.

If you bought Office 2010 alone, you would not get the email, collaboration or unified communication software available in Office 365.

Q: What is BPOS?

A: BPOS stands for Business Productivity Online Services, a cloud service Microsoft began selling in 2007. BPOS has email, collaboration and communication software. It does not have Web versions of Word, Excel or PowerPoint. Office 365 replaces BPOS.

Q: Why is Microsoft making a cheaper version of Office?

A: Microsoft's strategic direction is to move toward cloud computing in which companies store software and data on Microsoft's servers and access them via the Internet with devices such as a smartphone, tablet, television, laptop or desktop computer.

Traditional Office software has competition in Google. Google said 30 million people at 3 million companies are paying for Google Apps.

Microsoft's cloud service has attracted "millions" of subscribers since 2007, according to Kurt DelBene, president of Microsoft's Business division.

Microsoft believes it can sell Office as a cloud service to small businesses that don't buy Microsoft's Office server software.

Some businesses would prefer a monthly recurring fee to a one-time capital expenditure on new software every few years.

"We think it expands our business. In our traditional software business, we compete for 15 percent of the total IT budget. We think we can go up to four to five times that with Office 365," DelBene said.

The cloud services Microsoft sells will probably have a lower profit margin than sales of traditional software in a box.

Q: Can I trust the cloud?

A: BPOS had a couple outages over the past few months. Microsoft said Office 365 is built on a different software architecture than BPOS, and testers have said the beta version was reliable.

Microsoft and Google both guarantee that their cloud services will be available 99.9 percent of the time. That means the service could go down for 0.1 percent of the time, or 43.2 minutes in a 30-day month.

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com

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