In spite of what you may have heard, Microsoft isn’t betting the farm on Office 365. But Redmond is certainly sacrificing its largest cash cow to the cloud gods.

With Office 365 available in open beta today, everyone has a chance to see what’s new, what’s old, and what’s in desperate need of improvement. Permit me to point out some of the high spots. I’ll also show you how to avoid a few pitfalls I encountered when getting started.

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[ Microsoft’s Exchange Online, SharePoint Online, and Lync Online combo is good. Is it good enough to cost you your job? See “Will Office 365 get you fired?” | Follow the latest Windows developments in InfoWorld’s Technology: Microsoft newsletter. ]

A few pitfalls notwithstanding, the beta itself seems quite stable. I had no problems with any part of the beta using Internet Explorer 9, Firefox 4, or Chrome 10, and I used all of them extensively.

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Best of all, Microsoft has done a remarkable job of making Admin functions accessible to people with no Exchange, SharePoint, or Lync experience. Individuals and small companies that have shied away from the big server tools now have a chance to catch up with the large corporate installations, without breaking the bank or seconding an employee to full-time server servitude. That’s a notable achievement.

What, exactly, is an Office 365?
The best way to explain Office 365 to your boss is that it includes Office 2010, if you want it. But mostly, it includes cloud-based versions of the server glue that ties the Office pieces together: Exchange for email, SharePoint for document collaboration and Team Sites, and Lync for live communications.

For smaller organizations, Office 365 means getting all of those glue-together pieces without running your own servers or hiring network admins because Microsoft provides simplified forms for controlling the glue, as well as providing all of the server oomph your organization needs over the Internet.

There are lots of good things in the glue. For instance, Exchange lets you get at all of your email through the Outlook Web App, so you can move freely back and forth between Outlook on your PC or Mac and Outlook in a browser or on a phone or iPad. Actions you take on one device (such as sending or deleting an email) show up on the others. Exchange also lets you share calendars and contacts. SharePoint supports central document storage and collaboration in Team Sites. It even has a click-and-drag, rudimentary Web page construction application. Lync covers instant messaging, VoIP calling, and videoconferences, and it ties into Outlook and SharePoint Team Sites.

For larger organizations, Office 365 can, at least in theory, off-load some of the work currently performed by your network admins and make it considerably simpler to set up far-flung locations. Even a single location can mix Office 365 and non-Office 365 users. If your company is eyeing Exchange 2010, SharePoint 2010, and Lync 2010, Office 365 makes the deployment simpler. Microsoft guarantees backup, security, and uptime. There’s a great deal of debate as to how much of the network admin function should be off-loaded to Microsoft. And the process of moving from in-house servers to Microsoft’s servers in the sky promises to be a fertile, lucrative ground for specialized consultants for the next decade or two.