Microsoft Office 365 has gained rapid adoption among small and medium businesses (SMBs) throughout the Asia-Pacific region, growing 400% in the last three quarters, says Microsoft. The service was first launched in June 2011 in Singapore, Malaysia, Australia, and New Zealand before being rolled out in other parts of the region.

“Prior to Office 365, SMBs were massively underserved, relying on a ‘hodge-podge’ of older solutions that didn’t work together. With Office 365, they can experience the latest in productivity from a familiar and trusted source. This is why SMBs are moving to Office 365 in a major way,” said Andrew Pickup, Microsoft’s Asia-Pacific chief marketing and operations officer.

According to Microsoft, customers are also enjoying cost savings of 10% with the deployment of Office 365. The Microsoft press release also contained brief case studies of how SMBs in the region (two from Malaysia, one from Singapore, and one from New Zealand) benefited from going with Office 365. This typically entails reduced expenses and greater work efficiency after deploying Office 365.

When I spoke with John Fernandes (the director of marketing and operations of Microsoft Singapore) last year, he told me that Microsoft had more than a decade of cloud experience vested in the form of Hotmail with its almost half a billion user accounts. Fernandes was also candid about the outages that have occurred with Office 365, but highlighted Microsoft’s mitigation planning and availability of resources to deal with them.

SMBs account for 90% of all businesses and make up more than half of the total workforce in the Asia Pacific region. It is easy to understand why smaller businesses that might not be able to afford the cost of the requisite licenses and hardware to set up their own Exchange or SharePoint server would happily choose Office 365.

It is not known whether Office 365 is cannibalizing the company’s core server and Exchange Server market, which may be the case if sufficient businesses opt for the company’s cloud-based Exchange in lieu of rolling out their own servers.

Microsoft Singapore declined to share additional numbers, citing their unavailability.

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