MICROSOFT BELIEVES its new cloud-based office suite, Office 365, will be able to compete with rivals such as Google without cannibalising sales of its traditional office product.

The service, which was launched in 40 countries this week, offers businesses web-based access to applications such as Microsoft Word, Sharepoint and Exchange.

“The basic premise of this is collaboration for businesses of any size,” said Jeremy Showalter, productivity lead at Microsoft Ireland. “That could mean instant messaging, online meetings, video conferencing or application sharing.

“It is very attractive for those interested in working from anywhere and it is such an important step for us also.”

Office 365 will be available in a number of different configurations, with the entry-level package costing €5.25 per user, per month. O2, UPC and Vodafone have also partnered Microsoft to offer the service as part of their business bundles.

For most users, the information will be stored in Microsoft’s public cloud, with its Irish data centre playing a key role in this. Mr Showalter said the level of security it offers as part of this makes it an easier sell even for conservative companies. “It is a question that customers ask, and they should be asking,” he said. “When they look at the relevant security in our centre, it is a wide spectrum compared to the amount of security a small organisation or even a large enterprise in Ireland might have on their own.”

Companies can chose a hybrid model for Office 365, which is more expensive but gives them rights to use on-premises Microsoft software. This, along with the way Office 365 integrates with Office 2010, is why the company is not worried that one product will negate the need for the other, according to Mr Showalter.

He also said he felt Microsoft had got the pricing right so that it would be competitive with rival offerings.

One organisation that is already using Office 365 is Fastrack to IT (FIT), a non-profit that develops programmes to help unemployed people train in IT. According to FIT chief executive Peter Davitt, using the service has created new opportunities for them. “We came looking at this purely from a business point of view; we were asking how can we do more with less resources in a more efficient way,” he said. “We have 20 people operating throughout the country and now we can communicate, share documents, present diaries and everybody is on the one page.”