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Thursday, 18 August 2011 21:52

Microsoft Office 365 outage a disaster or false flag


Some may argue that the recent outage of the Microsoft Office 365 online service on Wednesday across major centres in the US was a major embarrassment for the software behemoth. But was it really or was it a vindication of the company's legacy in-house software model?


Let's face it, software as a service (SaaS) aka cloud computing should be anathema to a company that dominates the global market in productivity software sales. For more than two decades Microsoft has been making tens of billions selling software that companies and consumers are forced to buy and load on their local hard disks.

All of a sudden along comes a thing called the Internet. Until relatively recently - say 10 years ago - no problem. Neither the bandwidth nor the applications were there.

As far as email is concerned, Microsoft never had any real issue. Its free advertising supported webmail product Hotmail was no real competitor to the far more powerful client based Outlook.

Then broadband arrives along with Google, enterprising SaaS providers like Salesforce, cloud computing becomes a buzz word and things start to change rapidly.

In fact, things start to change so rapidly that Microsoft feels that it needs to have its own cloud computing offering in the office productivity space, the dominion of Word, Excel, Powerpoint et al - aka Microsoft Office.

So in June, Microsoft launches Office 365, the SaaS version of its massively profitable office productivity suite. Now we have Microsoft offering a service that is a real cloud-based competitor to its own traditional massively profitable client based business software.

Then in August, less than two months after the launch of Office 365, the service goes down in a major outage for at least two hours affecting major regions, including the two largest cities in the US.

If Microsoft was a SaaS company, this would be a PR disaster. In fact, the event itself reinforces the perception that relying on the SaaS and cloud model for mission critical applications is foolhardy, especially when cloud companies like Amazon, Salesforce, Quickbooks and even Google have suffered major outages in recent times.

But Microsoft, as we all know, is not a SaaS company. It still makes the vast bulk of its revenue from selling software that is installed on hard drives. So is the Office 365 outage really a disaster for Redmond or really just a false flag operation - a vindication of the way Microsoft has done business since it was founded?


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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.



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