SharePoint goes cloud first, but will customers follow?


Last week in this space, I wrote that this was a key SharePoint Conference and I was right. When Microsoft corporate VP for the Office Business Platform, Jeff Teper told the big crowd, "We will continue to have server releases, but we recommend moving to the cloud," it represented a huge change in the way Microsoft develops and deploys software.

Microsoft (NASDAQ: MSFT) was going cloud first and promising updates every 90 days to software that used to change once every three years. But as exciting and promising as this all sounds, SharePoint customers tend to move as slowly as the previous versions are updated--and that could be a problem for Microsoft. 

Wes Miller, an analyst at Directions on Microsoft, says the focus on the cloud is clearly a change in direction. He said with 2010, Microsoft rolled out the on-premise version and built the cloud version off of that."With 2013, they reversed the development view. The cloud is the tail that's wagging the dog this time," he said.

It wasn't long ago that Tony Byrne from Real Story Group joked that perhaps SharePoint 2013 should be renamed SharePoint 2015 because that's when most customers will upgrade, and indeed many customers have just made the transition to 2010 on-premises, and they may be afraid to move to the cloud too quickly.

In fact, one SharePoint customer I spoke to had lots of reservations about moving to the cloud. Greg Adams, the executive vice president for strategy and enterprise applications at Jones Lang LaSalle, a global commercial real estate company with 45,000 employees and a big on-premises SharePoint customer, wondered about a number of issues including how he would transfer customizations to the cloud, how licensing terms would transfer from on-premise to cloud and most importantly, what would happen if he changed his mind. He knows if he closed the data center, and then decided the cloud wasn't for him, it would take too much of a capital investment to build it out again--and it's a risk he's not willing to take right now.

But Adams also recognized that he doesn't want to be left behind and if Microsoft keeps to its 90 day update schedule, there might soon be a big feature gap between the on-premise version and the cloud, a gap Microsoft could be deliberately creating to encourage customers to move to the cloud. 

But the cloud strategy represents something more. It means that Microsoft sees the handwriting on the wall about the changes going on inside the industry. The future is in the cloud, mobile and social, and Microsoft has made a monumental strategic shift to move the product where it needs to be. That it's willing to go there before its customers are ready is a big gamble, but one that it must make to remain relevant.

Yet while Microsoft sees the need to shift to the cloud, interestingly, officials all but bragged that the on-premise and cloud versions are identical (at least for now), but I wondered if that's a good thing. Microsoft clearly is putting together the right pieces for a cloud strategy, and they have finally made the necessary connections between cloud, mobile and social, but they seem to have missed one key element. One of the basic tenets of cloud software is reducing complexity. If you want to be all things to all people and use the old ECM model, you can't bring the simplicity that users desire, and that could be an issue for Microsoft moving forward.

SharePoint is a complex piece of software, for better or worse, but that Microsoft has shown a willingness to move the company in a completely new direction and take an enterprise centerpiece like SharePoint and Office and move them to the cloud, shows flexibility I never thought I would see from a company the size of Microsoft.  

Whether its customers will follow in sufficient numbers, or if Microsoft can move the product beyond the hype cycle to a true cloud-centric strategy remains to be seen, but for now at least, based on what I saw last week, I see a company that is really trying to make a shift and that's remarkable in itself ... but how long will Microsoft have to wait for its market to catch up? It may need to be patient. - Ron