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Office 365 and the future of Cloud

Patrick Gray talks about how hosted infrastructure is now within reach of even the smallest companies, and how it will evolve.

My company is in the final stages of a migration to Microsoft's Office 365 cloud computing offering. At first brush, Office 365 is essentially hosted email and online versions of Microsoft's Office software. However, when you delve a bit deeper into the offering, one can also purchase a subscription that includes desktop versions of Microsoft's ubiquitous Office software, at a price that amounts to less than the cost of individual licenses.

I've always suggested that cloud should be about more than saving a few bucks, and for us, Office 365 promises a significant "hassle" savings as it will eventually replace our on-premise server that runs Windows Small Business Server. SBS was generally worry free, save for the bimonthly "ghost in the machine" that would require a couple of days of troubleshooting, time that could have been better spent elsewhere.

I will miss a few features of having a locally administered server. File and print services are now commodities available in big box store NAS units, but SBS offered centralized user administration and access management that's not easily replaced. This concern brings me to what most interested me from a larger industry perspective as we migrated our network: how hosted infrastructure is now within reach of even the smallest companies, and how it will evolve.

The dawn of the black box

Tools like Office 365 will serve most of basic infrastructure needs for small and medium companies; however, there are still instances when a local server proves beneficial. Network backup, centralized user and computer management, file and printer sharing spring to mind-services that can't easily be replaced by a cloud equivalent. What would be an interesting replacement would be local hardware that's remotely administered by a cloud provider.

A reasonable analogy is the cable box provided by your cable or satellite company. It's essentially a "black box" from a technical perspective: you're unconcerned about (and prohibited from) managing or maintaining the hardware, and interact with the device through a simplified interface or, in many cases, through an online portal that communicates with the box. It's not much of a stretch to imagine Microsoft, Google, or Apple shipping a "black box" that a small business plugs into their network, then configures via a simplified web portal. The box could handle file and print services, centralized user management, and even cache OS patches and virus updates, all without the care and feeding one would associate with a standard server.

Microsoft's Small Business Server seems to have been striving toward a "network in a box" concept, but at the end of the day still requires a full-scale server and the associated maintenance. The box I'm envisioning would likely be about the size of your current cable box, and perhaps be based on solid-state drives and fanless hardware. Rather than a howling rackmount unit, it might sit quietly in a 20-person office, updating its configuration automatically based on changes to the associated cloud account. Microsoft is already making moves in this direction, although it's still not the computing equivalent of the cable box.

Could this work for the "big boys"?

When one begins scaling to thousands of users, cloud services look less attractive from a financial perspective due to migration costs and the economies of scale that can be accommodated with thousands of users. A remotely-configured "black box" might seem like heresy to the CIO of a large company, but it's less of a stretch than one might imagine. All manner of single-purpose devices from routers and firewalls to anti-spam "appliances" are migrating toward this model. Most separate the underlying OS and associated configuration from a vendor-provided portal that configures the device. Virtual appliances fit the same mold, and it's not too big a stretch to envision basic network services following a similar route.

If nothing else, local devices that are centrally managed and configured from the cloud offer a level of flexibility and redundancy that would be appreciated. New branch office? Set them up on your vendor's cloud portal, have that vendor ship them a "black box," and moments after they plug it in their local network is up and running.

While cloud computing seems to be the latest and greatest, like most technologies it is not a tool for every problem. For many computing services, local resources still offer benefits, especially when a cloud-based management and configuration philosophy is applied. While we still may be a year or two away from a true "network in a box" product, the major players seem to be making the right moves to get us there.

About

Patrick Gray works for a global Fortune 500 consulting and IT services company, and is the author of Breakthrough IT: Supercharging Organizational Value through Technology, as well as the companion e-book The Breakthrough CIO's Companion. Patrick has...

14 comments
zazizou
zazizou

I have migrated dozens of companies from 10 users to 200 users to Google Apps, mostly from Exchange. No major problems so far. I believe the future (for SMBs at least) will be hosted VMs, Apps, databases, email. All you need is an internet connection with ISP failover, an awesome firewall and you're good to go.

MartyL
MartyL

I don't trust this model. I want my gizmos and their code on my desk, within reach of my own little toggle-flipping fingers, thankyouverymuch. ------------------------- It's not my job to prove the earth is round - it's my job to help the Flat-Earthers find the edge.

dcuthill
dcuthill

I'm with Jeff on this. Generally worry free once you get past the DNS issues. Some DNS hosters who also happened to previously host Exchange did not like losing their customers and made the experience as cumbersome as possible .. ie raise job tickets for each little DNS change - there are 2 touches here and having to touch the ticket 2x introduced an articial and unnecessary time delay. Other than that it is a joy to work with.

RMSx32767
RMSx32767

"SBS was generally worry free, save for the bimonthly ???ghost in the machine??? that would require a couple of days of troubleshooting, time that could have been better spent elsewhere." Whether your "bi-monthly" couple-of-days was twice per month, or every two months, such downtime is absurd, and would be unacceptable in a mission-critical environment.

aflynnhpg
aflynnhpg

I'll let you know after February 3rd. So far the communication on migration has been very poor and very one directional.

cybershooters
cybershooters

I've been trying to work out how Office 365 makes sense from a cost perspective, I don't think it does, the article says when scaled to large organizations it doesn't work, but it doesn't work in SMBs either. The argument is that it reduces IT staff, but it doesn't, because if there is only one person it just makes their job easier (supposedly, I'm not convinced) but you still need someone to do administrative tasks. Also the $6 per user per month model is only for really small companies, even for most SMBs it would be the $24 per user per month and that is really steep, say you have a company with 100 users, the cost is $28,800 per year, and say you replace your current server every 4-5 years (as a lot of people do nowadays as they are more reliable) so $28,800 x 4.5 = $129,600. Office professional per seat you can get for around $375, so $37,500 for office for a traditional setup (and you can use it forever), that leaves you $92,100 for your backend servers (how many are we talking, two?) and Exchange, a couple of Windows server licenses, plus CALs (and you probably need the CALs for other reasons, e.g. domain controllers). That isn't going to cost $92,100 or anywhere near it. And plus, you own that infrastructure, the cost is known upfront, how much is Office 365 going to cost four years from now? What will the feature set be then? Unless I'm missing some major advantage, doesn't make sense. Oh, plus you probably need more internet bandwidth and even if you don't you really do need a super duper reliable internet connection - if the connection goes down, you lose internal e-mail, not just external. Things they say you won't need anymore you do need (e.g. backup software) because there are very few setups that could be put completely into the cloud. It's just a more sophisticated subscription-based model for software, doesn't make financial sense because it leaves you at the mercy of the whims of Microsoft. I think we should all avoid it wherever possible, if lots of companies start using it then you really are leaving yourself open to Microsoft abusing a monopoly.

TNT
TNT

It seems to me this concept of a "black box" to control user accounts and act as a print server, or even an internet gateway was realized a decade ago with "server appliances". I recall setting up just such a device for a small office back in the day and thought it was a real breakthrough. No AD server, Print Server or ISA server, it was all managed through a box that had Linux and a custom configuration interface for the services and user accounts. It could even be managed remotely and cost less than $1000 at the time. I never understood why they didn't take off.

jeff
jeff

The biggest 'problems' I have had, have been with the ISP's and domain providers in getting the DNS records properly updated. Outside of that it has been very smooth for all the installations I have done. As a Partner and Cloud Services Reseller I have had great support. Just stay with the E series subscriptions, especially if you do not have a Partner supporting you. Being able to call for support is worth the extra few bucks in my opinion.

cquirke
cquirke

"What would be an interesting replacement would be local hardware that???s remotely administered by a cloud provider." - it's called a "bot net". BackOriface, anyone? :-)

phil
phil

I have been tasked with setting up 365 and its been a nightmare from start to finish. The support is non existent and the documentation is also very very frustrating and incomplete. I would avoid 365 at all costs.

amarcho
amarcho

... someone uses Office 365 for illegal purposes and the Government or whoever shuts everything off? I know people who used Megaupload for their work and to share legitimately their very own files (reports, documentation of their projects, etc.): will they trust ANY other cloud offering?

davidmartinomalley
davidmartinomalley

I agree totally - we priced out a few hundred licenses for our company, and there was literally no cost savings. Now, I agree with the "savings" in the form of diminished maintenance, etc, but there needs to be a bigger carrot to make us move. Like it or not, CFO's have heard that cloud services mean lower bills.

phil
phil

We are gold partners and have had virtually no support at all: its been a total nightmare. The DNS records bit was easy by comparison.

cybershooters
cybershooters

Hadn't thought of that one, that's a really good point.