Office 365: A snowball’s chance in hell?

One of the conversations I routinely have with customers is about Office 365 which is our subscription-based online office and software plus services suite.  In my conversations I always ask customers what business are they in. Do they want to be in the business of running and maintaining infrastructure such as mail and related collaboration tools or do they want to channel their scarce resources to be working on the business and contributing to the company’s growth initiatives.  As you might suspect, the answer is the latter but Power & Utility companies are a conservative group and rightfully so as their top priorities are keeping the lights on, the gas flowing, the water running and above all, safety.

Plus, regulated Utilities are heavy Capex (capital expenditure) companies rather than Opex (operational expenditure) which means there is a strong tendency to steer towards assets that can be capitalized and incorporated into the rate base.  This allows a Utility to earn a specified rate of return as permitted by a Utility’s regulatory agency. This fact would lead many to conclude that these Capex centric Utilities would not invest in a subscription based service such as Office 365.  In fact, not long ago I said that there wasn’t a snowball’s chance in hell (translation means “never”) that the regulated, Capex Utilities in the US would sign-up for Office 365.

Boy was I was wrong!

Over the past year three of the top ten Utilities in the US have signed up for O365 and many more Utilities in the US and worldwide have jumped on the Office 365 bandwagon.  How did this heavy Capex industry all of sudden embrace such a service?

After analyzing the Capex vs. Opex scenarios and the overall cost of their on premise installations, Utilities are finding Office 365 financially very attractive and better for the bottom-line of the company.  Office 365 can be implemented as a hybrid solution (cloud and on premise) which gives the Utility flexibility for supporting groups that are subject to critical infrastructure constraints.  Office 365 is built from the ground up with security and privacy in mind and the fact that no Office 365 services are supported by advertising—and there is no risk that information will be scanned for ad targeting has been very welcomed by Utilities.  Utilities have a lot of legacy infrastructure and the ability to quickly modernize the legacy environment with modern tools for dramatic increases in productivity and a way to help attract the best and brightest talent has been compelling.  Plus, the support for multiple devices, automatic updates and upgrades and many more state-of-the-art collaboration features such as Lync, Yammer and SharePoint are major selling points.  A good overview of the current status of Office 365 is in a recent ZDNet article called: Office 365: After one year, how's Microsoft doing?

I have been amazed how far this conservative industry has come in such a very short time to recognize the value of Office 365. This is just the tip of the iceberg and yes, it appears that a snowball can survive in hell with the right value propostion. May the cloud be with you! – Jon C. Arnold