At TechEd 2011 last summer, I was very interested in hear about a coming add-in for Windows Small Business Server 2011 Essentials (SBSE 2011) that would integrate that new server to Microsoft's cloud productivity service, Office 365. The version we saw at the show was no more than a demo, and not running code, but Microsoft surprised me by delivering the final version of the add-in by the end of 2011 regardless.

I recently installed the add-in--called the Office 365 Integration Module--on my own SBSE 2011 server to see what the experience was like. And as expected, it certainly covers the basics, letting you assign existing domain-based user accounts to Office 365-based user accounts and vice versa, and create new accounts that are automatically provisioned for both. But as with Office 365 custom domain configuration, this add-in is a bit tough to setup if you don't really know what you're doing, so it might be best left to a Microsoft partner unless you happen to have a deeply technical person in-house.

As a refresher, SBSE 2011 is part of Microsoft's new line of "Colorado" servers alongside related products such as Windows Home Server 2011 and Windows Storage Server 2008 R2. Each is based on Windows Server 2008 R2 and shares a common infrastructure, including the same management console interface and add-in functionality. I previously reviewed SBSE 2011 on this site.

Office 365, of course, is Microsoft's cloud-based productivity service, offering Microsoft-hosted versions of Exchange Online, SharePoint Online, and Lync Online for amazingly reasonable pricing ($6 per user per month for individuals and small businesses). I've been testing Office 365 since its beta and have recently been writing a series of articles about various aspects of the service, including Office 365 for Individuals and Small Businesses, Office 365: Custom Domain Configuration for Email, and Better Together: Office 365 + Windows Phone.

So why use these services together?

Both products, of course, are aimed squarely at the small business market. (Though of course, Office 365 also comes in versions for larger companies.) And while most small businesses will probably make do without any on-site infrastructure at all, the nice things about SBSE 2011 is that it provides the right feature-set for today's small businesses. That is, you get on-site storage capabilities (including content sharing), automatic, centralized PC backup, automatic server backup, network health monitoring, remote access, and more. And SBSE is based on Microsoft's excellent Active Directory infrastructure, though it foregoes the typical complexity of such an environment and provides the single simplest AD setup and configuration I've ever seen. It's pretty impressive.

What SBSE foregoes is the on-site email, calendaring, document collaboration, and database functionality that was (and still is) provided by what I think of as the "legacy" versions of Windows Small Business Server. The current version, SBS 2011 (not to be confused with SBSE) is still kicking around, too, primarily as an upgrade for existing SBS users, I bet. Most small businesses, especially those just starting out, aren't going to want to host their own Exchange and SharePoint servers. Instead, they'll leave that to the experts: Microsoft, Google, or some other cloud productivity provider.

Going the Google route will save a little bit of money, but from what I can tell, Microsoft has the superior offering in Office 365. And if you do need some on-site capabilities like those offered by SBSE, you can combine the two to get a solution that is, in Microsoft's words, better together. Or at least that's the plan.

Installing and configuring the Office 365 Integration Module

The first step, of course, is to find and install the free Office 365 Integration Module add-in, which oddly enough is marketed as a Feature Pack. That's a term we don't hear all that often these days, but Feature Packs date all the way back to the NT days, when Microsoft was trying to differentiate between different types of system updates, including security and OS updates (Service Packs), functional updates with new features (Feature Packs) and more complicated, multi-product updates (Option Packs). Not that it matters.

You can download the Office 365 Integration Module from the Microsoft web site, of course. It's a small download--4.4 MB--and comes only in a single, x64-based version since SBSE, like all Windows Server 2008 R2-based products, is itself only available in x64 guise as well.

If you're familiar with how add-in installation worked in the original Windows Home Server version, then you've wasted your time: Things are different now and all of the Colorado-based servers utilize a more sophisticated new add-in technology that no longer requires placing things in certain places and then installing via the Dashboard management console. That said, you'll still need to be using the server interactively to install the add-in. I did so through remote desktop.

After a mandatory reboot, logon to the server (remotely) and then launch the Dashboard. The Microsoft Office 365 Integration wizard will appear, allowing you to configure this capability.

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Since I previously configured Office 365, I left the option "I already have a subscription for Office 365" checked and continued from there. If you do not already have an Office 365 subscription, however, you'll need to create one before you can continue.

After logging on to your Office 365 subscription with an administrator user account, you're prompted to accept a Strong password policy, which is required for SBSE/Office 365 integration. This happens to be the default password policy for SBSE anyway, and is required for user accounts that receive remote access rights to the server.

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After this, the add-in is configured and the server Dashboard is restarted because the add-in includes a Dashboard extension that creates a new tab for Office 365. You'll see this when it restarts.

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Using the Office 365 Integration Module

The Office 365 Integration Module exists for one basic reason: It synchronizes user accounts between your SBSE-based domain and Office 365. User accounts that were previously added to either SBSE or Office 365 can be assigned to accounts on the other and will remain linked going forward. And users you add in the future will be configured for both Office 365 and SBSE, assuming you perform the account creation from the SBSE Dashboard.

Note: For these features to work, two crucial SBSE features need to be enabled. First, Remote Web Access must be turned on. And second, RWA must be configured with an Internet-facing sub-domain (remote.yourcompanyname.com or whatever). This can be complicated in its own right, as you'll need a certificate of some kind, though you can generate your own via IIS. The SBSE documentation explains how.

Oddly enough, many Office 365-related tasks don't actually occur via the Office 365 tab. In fact, as you look around and click on items, you'll discover that many of the links here simply open IE and navigate to the normal web-based Office 365 interfaces.

That said, here are some tasks you'll want to do right away. Each of these works directly from the newly integrated Dashboard, not from the Office 365 web site.

Link your Internet domain to Office 365. You do this via a wizard, giving your users the ability to utilize your custom domain name in their email addresses. (That is, user@mycustomdomain.com instead of user@companyname.onmicrosoft.com.) To walk through a wizard that accomplishes this task, click "Link a domain to Office 365" in the Dashboard's Configuration Tasks list.

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Assign SBSE users to Office 365. From the Users tab in the Dashboard, you can assign existing SBSE users to Office 365 user accounts. To do so, right-click on a user and choose Assign Office 365 Account. A wizard will appear, letting you create a new Office 365 user account or assign that SBSE account to an existing Office 365 account.

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Create new users to match additional Office 365 users. If you have users in Office 365 that don't have corresponding user accounts in SBSE, you can create accounts for them in the Dashboard and then link those accounts to Office 365 accounts using the method noted above.

Change the Office 365 administrator account. Via a wizard, you can determine which admin-class Office 365 account is used to access Office 365 features from the Dashboard.

Final thoughts, and a wrench in the plan for integration

Integrating Office 365 and Windows Small Business Server 2011 Essentials user accounts is an interesting idea and one that allows Microsoft's latest SMB entry to compete on a more even footing with the traditional SBS offering. That said, I'm not sure what the potential audience size is here. While Office 365 is doing quite well, SBSE--like WHS 2011--seems mired in disinterest, with very few server maker offerings (SBSE is typically sold with new hardware) and little in the way of buzz.

That's too bad, but then both of these products also suffer from the same basic problem: Configuring them is far too complicated for the intended small business audience. I wrote about the difficulty of just configuring Office 365 for a custom domain for email previously, but the truth is, I glossed over how difficult the similar custom domain configuration for SBSE remote access can be in my note above. Asking a typical SMB worker to undergo either of these tasks could be frustrating and ultimately futile.

My advice here is simple: Both Office 365 and Windows Small Business Server 2011 Essentials offer excellent functionality for small businesses, and integrating them in a "better together" fashion makes even more sense, but only assuming that you can get someone else to do it. This is an excellent opportunity for Microsoft's partner ecosystem to step in and fill the gap. It's a role these companies already play. I'm guessing most small businesses just don't know about that option.