On June 28, Microsoft officially released Office 365. On the heels of the release, Microsoft also announced that Dynamics CRM Online will be added to the Office 365 offering in the second half of 2011. While the details on licensing and pricing are scarce, the benefits are clear.

Before I get into the details, let me take a moment to explain. Office 365 is the new name for the Microsoft service offerings previously known as Business Productivity Online Suite (BPOS),Live@edu, and Office Live Small Business. The basic Office 365 package is an upgrade to the 2010 versions of Exchange, SharePoint, Office Communications Online, and Live Meeting (note: Office Communications Online and Live meeting have been combined as Lync).

Office 365 is not a new version of Office that will be hosted in/on/via the cloud, but rather a rebranding effort for BPOS. As of now, BPOS is no longer available for purchase. Microsoft Office applications are the core of Office 365. Microsoft Word, PowerPoint, Excel, OneNote, Outlook, and other Office applications connect to Microsoft Exchange, SharePoint, and Lync.

One of the key advantages to CRM Online being added to the Office 365 suite is the Azure platform. Azure is an operating system for the cloud based on a pay by use model, eliminating the need to buy servers or dedicate resources to infrastructure management. Azure’s automated service management protects businesses from the caveats of hardware failure and routine maintenance. Currently some components of Office 365 are still run on servers in Microsoft’s datacenters and are not Azure based. However, Microsoft has a goal to eventually move Office 365 and all of its components to the Windows Azure cloud platform.

This means that businesses will have the ability to receive updates and upgrades with minimal effort because the Microsoft Dynamics CRM team is focusing efforts on an agile release model approach to efficiently deliver products to users. Previously, major product releases were 2-3 years apart. Now a single codebase across all versions of the product will enable shorter development cycles and the ability to deliver updates and enhancements bi-annually to both on-premises and online customers.

Additionally, as part of ongoing Dynamics development Microsoft promises to meet the demands of new generation devices like smartphones and tablets by providing anytime, anywhere access to Microsoft Dynamics CRM, creating consistency across the user experience whether on the road or in the office. Some examples of these capabilities will include intuitive cross-device functionality and multi-browser support.