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Microsoft joins the cloud

Posted 7 years ago in Advisors by Xero Blogger
Posted by Xero Blogger

The launch of Microsoft Office 365 – an online capable version of the widely used Microsoft Office – is great news. Not only does it validate the online space by one of the largest and most established software houses, it re-confirms the position of the cloud as the next step for software.

Office 365 brings together:

  • Office Professional Plus – the latest version of office productivity tools
  • Exchange Online – email, calendar and contacts
  • SharePoint Online- document management
  • Lync Online – audio/video calling, instant messaging, conference calling

Watch the video overview:

This is a great opportunity for the accounting profession. Accountants live in Office tools like Outlook, Word and Excel, and there’s a huge swing amongst the profession to move from desktop accounting software to cloud solutions. Firms are now moving the back office tools into the cloud and saving loads of money on infrastructure investment. With Office 365 you still get to use Office, but you can throw out the expensive servers and access everything from anywhere.

“Office 365 makes life easier because all the data is kept together in one place, and there’s the ability to access it from anywhere at anytime, regardless of whether you’re in the office, visiting a client or at the beach!”

Mark Lawton, Accplus

We really like that Office 365 commoditizes document management for accounting practices. A primary task for all accountants is adding value to documents. Before Office 365 it was expensive for accountants to adopt document management and clunky for them to check documents in and out as part of their daily workflow. Office365 solves that.

We took the document management component a step further by engaging SharePoint experts Provoke to work with some Xero partners to define and build an accountant-specific template to make Sharepoint work beautifully for practices. This eliminates the expensive consulting (often tens of thousands of dollars) that each practice would normally require to implement their specific taxonomy in the document management system.

You can see PracticePoint in the screen shot below.

We’ve also been working closely with Microsoft pre-release to get Office 365 integrated into our Modern Practice initiative. The result is a seamless flow of data from the client through to the accountant’s office – across practice management, tax filing, accounts production, document management and everything else a practice needs to operate entirely in the cloud.

Microsoft products are renowned for their depth of features but until now lacked the cloud aspect that Google nailed such as co-authoring, sharing, and anywhere/anytime access. Many will ask should they go for Office 365 or Google?

Office 365 is quite different to Google apps. See this review from InfoWorld.

We believe accountants will use both technologies. Most practices will still need Office, but Google Docs is also useful in many scenarios. The clear benefits of the cloud-enabled Office 365, combined with commodity level pricing, makes Office 365 and the Modern Practice ideal for almost every practice.

We’ll keep you informed as our beta customers gain experience over the next month.


Dennis Howlett
July 4, 2011 at 12.24 pm

I strongly disagree with this assessment of Microsoft as a cloud player. It isn’t. This is NOT Office in the cloud, however MSFT sugar coat it.

The web apps are crippled versions of the desktop types and require additional licensing for very little benefit. The UI is awful. About the only good thing I can find to say about Office 365 is that the security model looks good.

Sharepoint is sort of OK but at the end of the day it is a clunky pile of tools.

And – FWIW – I wanted to like this, I really did, but it was so off putting I dumped it almost immediately. As have most of my colleagues who tried it out.

All I can say is that if you guys can get it to work and provide enough value via MPI at low cost then you’ll have done the profession a service. In the meantime, I’m sticking with GAPE.

Richard Phillips
July 4, 2011 at 12.52 pm

Thanks for the views @Dennis – strong as always. The point is not so much that this is Office in the cloud, but that the cloud functionality which was missing before (co-authoring being a major one) is now available. Rather than having limited features all the time as with the Google offering, Office 365 allows you to have full-featured richness on the desktop, then seamlessly move to a lighter version when you need to collaborate.

The important thing here for us is that accountants currently know and use Office tools extensively. So from that perspective it’s a smaller leap to cloud functionality than switching to GAPE for those who aren’t of the early adopter mindset.

On the additional licensing front for web apps, it depends on the plan you adopt (Microsoft have uncharacteristically made this quite complex…). We’re suggesting the E3 plan, which includes web apps and the latest version of the Office client for your desktop.

PracticePoint (SharePoint) with integrations built straight into WorkflowMax (Practice Management) is quite slick and more than what most firms will need from document management in it’s current iteration. As we build this out I’m confident even the hardcore users will see merit in using it.

All that said, lets keep the conversation going – you never know who is listening in the Product Dev team at Microsoft. Although I’ve no doubt you’ve emailed them your feedback directly already.

Dennis Howlett
July 4, 2011 at 1.50 pm

@richard – nice try but it won’t fly and from my position, your argument flies (sic) in the face of innovation.

Microsoft is struggling with the same problems that every incumbent vendor has that tries to make this switch. Cannibalizing the existing solution in the face of low cost alternatives.

Xero has said on many an occasion the equivalent of your either in the cloud or not. On this occasion, I’m saying ‘not’ and especially having listened to the bizarre version of ‘cloud’ that Microsoft chose to punt at an analyst session I attended.

To say that accountants know one solution is the same argument as saying they know MYOB – isn’t it? Show them something that delights (as my videos of yours and other cloud vendors’ solutions have done) and they jump.

I’m not going to pretend that GAPE is better than desktop Office but it is way better than the webapps. Ask you this: what happens when accountants want to collaborate on a spreadsheet that includes pivot tables, one of their fave features? Can’t be done. What about changing a formula? If it’s anything beyond the very basic stuff then again, can’t be done. Word is likely less of a problem as are presentations but on Excel? Not a snow flakes’ chance in hell that accountants will run with this as a cloud offering.

In its current iteration? My and many others’ verdict? A dud. Sorry.

John Rutherford
July 5, 2011 at 12.10 pm

The comparison between Office 365 and Google is a bit of swings or roundabouts argument. They both have merits.

From a pragmatic and non-tech-geek point of view, one of the main issues I have with the whole Office / Goole / Other, having tried alternatives to Office in the past (and gone back to Office), is the standardized formatting of documents between different systems. As it stands, like it or not and however unfair it may be, Office is the industry standard and as an accountant in practice the last thing I want to do is waste time sorting out the formatting of documents transferred between the different offerings; generally client’s use Office. Further, as an industry standard, integration with other produces I want or use (cloud or desktop) is more likely available with Office. I also don’t particularly wish to retrain staff to use an alternative which doesn’t have all the features we need.

As most appear to agree, the desktop version of Office is better and the desktop is where 95% of my work is done, the cloud is where I’m storing my data instead of the office based Server; OK maybe I am unable to collaborate on a spreadsheet which includes a pivot table online directly in the software; but if I need to do this there are other ways (remote desktop sharing for example). Basically with Office 365 and the inclusion of the full desktop version, not only do you get a steppingstone to the Cloud but also a certain amount of the best of both worlds.

Until there is seamless integration between the different systems and a more powerful desktop or cloud offering, I’ll stick with Office but use Google as and when needed.

Rod Drury Xero
July 5, 2011 at 7.42 pm

I agree that the web versions of Office are a novelty. But the combination of installed Office with cloud storage seems to be working very well.

Just tonight I’ve been going through Google’s forced transition of customers from normal Google Accounts to App Accounts. What a confusing disaster.

Firstly I lost my RSS subscriptions. After a mild panic I managed to sign back into the old account and download an OPML file and import that to the new account. I bet not many people know how to do that or even what OPML is.

Then I found that my RSS reading application Reeder doesn’t work against the new account. (

Loyal Google users using domains for their Google email are shut out of Google Profiles so can’t get access to Google+. Like being left outside at the cool kids party. With no real way to talk to Google this is frustrating a huge numbers of users.

So as much as we all want it, Google is just not ready yet for prime time. Thinking an accounting practice can manage customer documents solely using Google Apps and not Office is just fantasy.


Adrian Pearson
July 5, 2011 at 10.46 pm

In almost thirty years working in accountancy practice I have NEVER needed to collaborate on an Excel spreadsheet or Word document. Honest.

Whatever the envisaged use case is for collaboration on office documents I haven’t seen it in real life. So, on that basis, rich desktop clients win hands-down. By offering a “hybrid” approach Office 365 wins against Google Apps.

Accountants don’t give a monkeys whether something is “pure” cloud. They have work to do and simply want the best tool for each job.

Gary Turner Xero
July 5, 2011 at 11.38 pm

Adrian – I’ve been blending my spreadsheet use from 100% rich desktop Excel to Google Spreadsheet over the last two years, I’m habitually still more comfortable with Excel but do spend more time in Google Spreadsheet than I imagined I would.

Collaboration use cases I’ve seen that work well are quickly capturing and sharing information with disparate team members such as simplistic forecasting. A classic scenario where people used to email around spreadsheets asking for people to review and fill in blanks does work much better and more efficiently in the online paradigm.

Whilst technically not an accountancy accountancy discipline – although accounting firms do require to market themselves like any other business – I’ve also seen marked time and efficiency savings in drafting documents with an online word processor where the live editing with the revision histories of mutliple people reviewing and editing a single document are significantly better online than the classic emailing around Word documents with Track Changes editing.

It is early days and the tools and working practices are far from perfected yet – it’s going to take a while to unlearn 30+ years of offline document management wrangling – but there are definitely flickers of advantage in relocating office documents to the cloud.

“Collaborate” is probably too much of a vague, airy-fairy marketing term for some – but even if all you do is view or review documents online without editing them, a central repository accessible from multiple devices types is definitely useful.

Adrian Pearson
July 6, 2011 at 12.56 am

Hi Gary,

On reflection my “NEVER” should perhaps be “extremely rarely” but here I am taking collaboration to mean co-authoring.

I can fully understand how online editing helps massively for co-authors but, for the typical small accountancy practice use cases, we have one author (say the accountant) with input/feedback coming from another party (say the client). In this scenario email works quite well, for managing comments rather than edits.

For accountants, and others, working in industry I can imagine that co-authoring is more prevalent.


Jon Stacey
July 6, 2011 at 1.43 am

As a practice we have basically adopted the maxim that if we can clear computing boxes out of the physical office, we will. It has saved us serious amounts of money in terms of IT expertise and produced untold advantages in terms of our interactions with each other and our clients.

We have moved 90% of our Office use to GAPE and have found that the interactive review of audit workbooks, presentation and proposal collaboration and better document management have been really valuable.

The 10% use of Office is now being helped by the Cloud Connect provided by GAPE.

We’re all at the point of wondering where this will go next – as early adopters we might have jumped early but that’s part of the fun that comes from the market position. It’s fresh and exciting. If we have to change in a couple of years or even next year, we have a culture that’s very open to that possibility. Keeping as close to the client as possible and taking technology advantages as they arise is very much our ethos.

July 6, 2011 at 11.48 am

(Note for self and the similarly acronym challenged: GAPE = Google Apps Premier Edition.)

July 19, 2011 at 11.16 pm

Wow, there really is quite a bit to all this. Having seen the demonstration today of office365 and Practice Point I was quite impressed and I could see a lot of uses for being able to collaborate with clients using excel online. I am not technical enough to really understand all this but it sure does make it tricky trying to map out a technology roadmap for an accounting practice. I suppose we just have to take some plunges and get on with it, stay adaptable and for the me the main thing I want to be able to see is do the tools help in providing better services to my clients. Looking forward to the furthering discussions and seeing where all this takes us.

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