Steve Ballmer says Microsoft is “winning, winning, winning, winning, winning” in the fight with Google and other competitors to move businesses into the proverbial “cloud.” But the story is, well, more nuanced than that.
Little more than a month after Ballmer channeled Charlie Sheen at a conference in San Francisco, Microsoft has announced that Office 365 — the latest online version of its venerable Office suite — is being adopted eight times faster than its predecessor, Microsoft BPOS (Business Productivity Online Service). But the company declines to say exactly how many businesses have paid good money to use the five-month-old service.
This is only what you’d expect from a big-name corporation flaunting a new product, but Takeshi Numoto — the Microsoft corporate vice president who oversees product management for Office 365 — does tell us that most businesses are using Office 365 in tandem with local software. Microsoft is moving businesses to the cloud, but only in part. Office 365 offers hosted versions of Microsoft Exchange, SharePoint, and Lync — the Redmond platform that combines IM, VoIP, and video conferencing — and though Microsoft also provides web-based versions of its Office clients, it’s still pushing the use of good, old-fashioned desktop tools.
Whether it’s “winning” against Google or not, it’s playing a very different game. “Customers continue to deeply use [the local desktop version of] Office,” Numoto tells Wired. “It’s very much a complementary scenario. You use both.”
He did say, however, that Office 365 has seen “particular traction” among small businesses, a market where Google has been successful with Google Apps, its suite of online business tools. According to Numoto, 90 percent of Office 365 customers are small businesses with fewer than 50 employees. “Historically, this market didn’t have access to enterprise-grade e-mail or collaboration platforms,” he says. “Office 365 has been a way to expand our reach to these customers.” With Office 365, small businesses can use e-mail and collaboration tools without setting up their own servers.
The same goes for Google Apps — except that Mountain View’s suite is only used inside a web browser. Google says this setup offers greater convenience: You can access the full suite from any machine with an internet connection. But Microsoft counters by pointing out that local software still does things that an online application can’t.
Two weeks ago, as Google touted its Google Apps suite during an all-day event at its headquarters in Mountain View, Google enterprise sales and operations head Amit Singh told us that when Google pitches its suite to potential customers, Office 365 rarely even enters the conversation. “Microsoft is competing mostly using its on-premise stuff,” he told us, referring the use of local servers. “By and large, customers either want on-premise or cloud. And if it’s cloud, it’s Google.” According to Google, over 4 million businesses have adopted Google Apps, with 5,000 jumping aboard each day,
Naturally, Microsoft’s senior director of online services Tom Rizzo took issue with Singh’s characterization, but like Numoto, he made it clear Microsoft is competing with more than just the so-called cloud. “With Google, all they have is cloud,” he told us. “Of course they’re going to say that when someone goes to the cloud, they’re going to go Google. It’s bit like whenever you have hammer, everything looks like a nail.”
Today, five months after first unveiling Office 365, Microsoft also announced that trial versions of the service are now available in 22 additional markets, including Turkey, South Africa, Taiwan, and Argentina. And it has beefed up the service with some additional tools. This includes the ability to view document attachments with the web-based version of the company’s Outlook e-mail client, but Microsoft has also added a local Lync client for Mac users. Microsoft believes in the cloud. But not entirely.
Cade Metz is the editor of Wired Enterprise. Got a NEWS TIP related to this story -- or to anything else in the world of big tech? Please e-mail him: cade_metz at wired.com.