Office 365 to be a hit with Latin American SMEs due to low cost, Microsoft says

Wednesday, June 29, 2011

Microsoft (Nasdaq: MSFT) is confident its Office 365 cloud service will take off in Latin America given the large number of SMEs in the region, the service's low cost and the number of clients already signed up for the beta version, Juan Carlos Puente, Microsoft's Latin America manager for Office 365, told BNamericas.

Of the 200,000 Microsoft clients worldwide that tested the 365 beta version, 8,500 were from Latin American countries excluding Brazil, Chile and Argentina, Puente said.

Microsoft on Tuesday (Jun 28) commercially launched Office 365, which brings together Microsoft Office, SharePoint Online, Exchange Online and Microsoft Lync Online for a monthly subscription fee.

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"The productivity and collaboration technology that is used by large companies like Microsoft, Coca-Cola and Codelco can now be purchased by an SME for the cost of a sandwich, or US$6 a user per month," Puente said.

The executive said small companies would be encouraged to use the service given the monthly cost's predictability.


Puente said he is optimistic that piracy could fall given the low cost of the service versus the high return on investment and the fact that registered users will have access to the regular updates.

"Before, when companies bought Office, the acquisition cost was much higher and that perhaps lends itself to more piracy. Now the cost is very low and the return on investment comparatively much higher, so we think people will be less inclined to purchase pirated products," Puente said.

"We're no longer selling a product but a service, and it is harder to pirate a service," he added.


The executive said Microsoft's promises of heightened security in the cloud and availability - it promises 99.9% uptime through service-level agreements - would be a major encouragement, particularly for large corporations. He said the challenge with SMEs would be to teach them about the cloud's benefits.

"Many SMEs are not familiar with this technology. They don't know there are things that are better than hotmail, Google docs or Skydrive for managing their businesses. They're not aware that they can view online the work schedule of their colleagues to know when they are available and when they aren't. That's our challenge with SMEs," Puente said.

Microsoft is working with large telcos throughout the region to include Office 365 as part of bundled service packages offered to SMEs. Spain's Telefónica (NYSE: TEF) has already confirmed its interest in offering such packages.


With the growing trend toward mobility, Puente believes the greatest benefit of Office 365 is the fact that it can be accessed from any screen anywhere.

"One of the premises of the cloud is that you can access your data from any device. You can access not only your email, but your documents and data and those of your work colleagues, partners or clients in your browser from your PC, Mac or phone irrespective of whether it is Android, Windows, BlackBerry. That is the cloud," the executive said.