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."
