Office 365’s corporate takeover is imminent

Exchange Online is IT's biggest reason for shifting from on-premises Microsoft servers to the Office 365 cloud services

For the past two years, I've been doing a road show about Office 365 with Mimecast to businesses of all shapes and sizes in America and Britain. At the beginning of the show, when I asked the audience, "Who of you has moved or is looking to move to Office 365?" not one hand went up. Fast-forward to a week ago, and more than half the hands went up when I asked the same question.

This shift is happening much faster than I would have predicted.

There is no doubt that the driving force behind this shift is Office 365's Exchange Online component. I hear that rationale from everyone I talk to. And it's not only the people I talk to: A recent Gartner survey showed Exchange was overwhelmingly cited as the reason to move to Office 365.

Oddly enough, OneDrive for Business was the second motivator, but it was also one of the biggest disappointments thus far. Why? Because, as my colleague Galen Gruman has shown, OneDrive for Business works only partially.

Some organizations are motivated by Office 365's preconfigured SharePoint Online to assist with document collaboration and workflow, though the on-premises SharePoint remains much more capable. Skype for Business is making headway for instant messaging and conferencing as well, though it continues to be iffy in multiplatform environments.

Then there are the productivity apps -- Word, Excel, and PowerPoint -- which Microsoft has made work well not only in Windows but also in iOS, in Android, and in OS X.

Keep in mind that none of this means Office 365 has triumphed over Microsoft's on-premises services. On-premises Exchange -- IT's biggest reason to adopt Office 365 -- is still the leading email server by far. But over the next year or so, we will see the shift from on-premises Exchange to cloud-based Exchange Online/Office 365 reach the tipping point at which the cloud version becomes the majority.

Most organizations I talk to say they are making the move to Office 365 using a hybrid configuration. (Gartner's survey showed the same pattern.) That way, they can start slowly and onboard mailboxes in stages. The hybrid allows for a shared domain space, a unified global address list, free/busy calendar sharing, and more by first establishing a directory sync using the Azure Active Directory Connect tool.

Another option (although not a prerequisite) for a hybrid configuration is to set up single sign-on so that users can access on-premises and cloud features with the same username and password through either password synchronization (easier for smaller environments) or Active Directory Federation Services.

After that you'll want to ensure you have an Exchange 2016 server in your environment so that you can kick off the Hybrid Configuration Wizard and follow the prompts to determine the connection.

The Gartner survey also showed that most survey respondents were looking at a hybrid environment despite their size. I note "despite their size" because Microsoft offers a cutover migration option for companies with 2,000 or fewer mailboxes, which should encourage smaller organizations to avoid the hybrid approach. But many organizations are not ready to cut over; they prefer to maintain the on-premises connection, perhaps as a fallback.

At the same time, many of Gartner's survey respondents agree that the hybrid implementation is a pain to set up, which my experience helping clients certainly confirms. Microsoft is continuing to facilitate Office 365 adoption through its FastTrack program, but many organizations prefer to use third-party tools and/or consultants to help them get into Office 365 more easily.

The decision to move to Office 365 in the near future has already been made by most organizations, so the mental tipping point has already been reached. The real-world tipping point is soon to follow.

Copyright © 2016 IDG Communications, Inc.