Office 365 for Small Business: Two Suites Too Many

As Microsoft (MSFT) launches its latest Office 365 cloud suites for small business, I've got to raise a simple question: Why? Or more specifically: Why is Microsoft pushing three Office 365 small business suites when the world really only needs one?

First, let me credit Microsoft: Office 365 has come a long, long, long way since it debuted in mid-2011. Overall, Office 365 has become far more stable -- and far more popular -- than its predecessor -- BPOS (Business Productivity Online Suite). Listen closely to Microsoft's quarterly earnings calls, and you'll hear plenty about Microsoft's Office 365 momentum.

A case in point: In July 2014, Microsoft said its commercial cloud revenue grew 147 percent with an annualized run rate that exceeds $4.4 billion. Very impressive.

Still, I firmly believe Microsoft's cloud business model remains overly complex -- especially when compared to Google Apps for Work's sales model (which certainly has its share of momentum).

If you're a Microsoft customer in the small business segment (let's put aside enterprises for now), you've got to navigate three Office 365 options:

  • Office 365 Business Essentials ($60 per user per year).
  • Office 365 Business ($99 per user per year).
  • Office 365 Business Premium ($150 per user per year).

Office 365 for Small Business: Follow the Chart

What's the difference between the three cloud suites? Here's Microsoft's official comparison chart:

What Does It All Mean?

Zzzzzzz.... Oh... huh? Sorry. I nodded off. Comparison charts sometimes overwhelm my auto-shutdown senses, triggering an immediate personal nap.

Kidding aside, the real issue is what you don't see. Those Office 365 suite comparisons only cover small businesses with up to roughly 250 employees. Climb above that figure, and you have to start a new feature comparison of Microsoft's Office 365 enterprise approaches.

My recommendation: Keep simplifying your suite stack, Microsoft. Get it down to one offer for small business (up to 250 seats or so), and one for a true enterprise, and I'll be blown away. Again, just copy the Google Apps for Work sales model approach.

In the meantime, Microsoft, you know you've earned my respect. I used to wonder if and how Microsoft would ever make Office 365 a reliable, scalable winner in the cloud market. Somewhere around 2013, I became a believer based on your market momentum and product enhancements. Now, please go the last mile and simplify your licensing.