There's another economic factor at work here, too, and that's to do with the fact that educational bodies receive large subsidies for their Internet connectivity. "Our WAN circuits are the least expensive component of our network--they are cheaper than our LAN," says Richard Charlesworth, CIO of the Tennessee Department of Education. "That's the complete reverse of what you see in an enterprise. It means that a cloud service like Office 365 is uniquely aligned to K-12 because it gets traffic off our LANs," he added.

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Charlesworth chose Office 365 over Google Apps for Education, and more than 1,600 schools in 136 school districts across Tennessee will have access to the service. "It was very entertaining to watch those two big behemoths dance around the ring for dominance in K-12, but for us Microsoft was much more attractive in the long term," he says. "What we see in Office 365 is a surfacing platform, a commn platform onto which we can surface functionality. We want to build Web services for our schools and package them in SharePoint."

School districts in Tennessee will be able to deploy and manage Office 365 for themselves, or--for smaller districts--the Department of Education will build a fully managed service that it will deploy on their behalf. Students and teachers will be provided with access to email, office applications, and the ability to collaborate with each other using SharePoint.

Charlesworth is particularly excited by Microsoft's recent $1.2 billion acquisition of enterprise social networking company Yammer. "Microsoft's push into social networking was pretty stunted. My hope is that the Yammer acquisition is a drive to beef up social networking functionality considerably in SharePoint as it could be a very powerful element for students," he says.