Why Office 365 Is Overtaking Google Apps Market Share

Office 365 vs Google Apps

The tech industry is replete with various rivalries that consumers love to fawn over and follow every detail of, but one of the bigger ones has been flying under the radar despite involving two of the largest tech companies around. I’m talking about Microsoft vs Google, or rather, Office 365 vs Google Apps.

The two tech behemoths are not natural competitors, after all. Google is free to use search engine that derives profit from a number of different avenues, but the vast majority of its earnings are from ad based streams. Microsoft, on the other hand, is a company known for its software production, like Windows PC operating systems and Microsoft Suite, which includes application favourites like Word and Excel. 

Image credit - Raysonho via Wikimedia Commons

 

But despite the companies’ relative distance in terms of product, the two have been clashing in one important area: cloud productivity suites. 

With Office 365 vs Google Apps, you have a fight for the future of cloud management between the two companies, and that fight is heating up, though with Office 365 coming out on top. 

Research firm Gartner found that 13% of publicly listed companies across the globe use Office 365 or Google Apps for email, with Office 365 hauling in a share of 8.5%, while Google Apps for Work brought in 4.7% of that number. The remainder use on-premises, hybrid, hosted or private cloud email managed by smaller vendors, eschewing the giants. 

But these companies are fighting tooth and nail in order to lay their respective stakes in what is a developing industry. After all, having a properly organized and comprehensive management system is crucial to any modern business’s success, and that only becomes more true the larger and more complex the company’s structure. 

Interestingly enough, a large share of companies actually use both Office 365 and Google Apps in the management of their cloud work, with Okta’s Business@Work2016 Report claiming that 40% of its customers used both Office 365 and Google Apps. 

But that doesn’t mean the two are coexisting peacefully. In fact, in the majority of industries, Microsoft’s offering tops Google. 

Image credit - Bryan Mathers

 

Aside from the internet sector, Google Apps does not have a share of over 50% in any other industry as the exclusive cloud organizational software. Microsoft, on the other hand, has a majority exclusive share in six of the 10 listed sectors, including biotechnology, finance and IT services. 

So what makes Office 365 better than Google Apps? Is it better? 

While I won’t hazard to make a value judgment of one over the other as each offers its own range of qualities and shortcomings, what I will explore is why Office 365 is right now the dominant cloud software of choice. 

 

Familiarity 

 

The thing about Microsoft Office 365 is that it has a strong pedigree of top-tier offerings that companies have not only come to respect, but rely on. 

The familiarity that business owners and employees have with Outlook is one key reason that they’ll stick with ol’ reliable rather than switching over to the apps on Google’s side. 

Whether or not you believe Gmail is a superior email management system compared to Outlook, the amount of businesses that use Outlook and are comfortable with the user interface, features, layout, etc. are unlikely to shift towards Google anytime soon. 

And that goes beyond just email management. While Google does offer alternatives, programs like Excel keep Microsoft ahead of the game as many have years of experience with those applications, while Google has the difficulty of having to carve out its own space. 

 

Legacy Programs 

 

Speaking of Excel, there are certain applications that are contained within the Office 365 suite that make the choice between Office 365 vs Google Apps a non-starter in some situations. 

For instance, if you’re a lover of all things Microsoft Suite, you may find that Google App’s alternatives aren’t up to snuff. Not that they’re empirically lacking, per se, but rather the layout, design, UI, any or all of it might be enough to rub you the wrong way and yearn for the comfort of those programs that are tried, tested and true. 

 

More Comprehensive Offerings 

 

And Office 365 simply offers more. While Google Apps is by no means thin, Microsoft has simply provided more options for its users in a variety ways and included a number of different functions that Google has yet to match. 

Does that mean that you’ll need or even end up using all these functions? Not necessarily. But Outlook 365 has a much larger offering from which to choose from should you need to engage with those specific set of tools. 

As the saying goes, better to have a tool and not need it rather than need a tool and not have it. 

 

More Diversity in Apps

 

The data shows that companies generally grab the same number of off-the-shelf cloud apps regardless of their size, usually settling on somewhere between 10 and 16 apps. This is up 20 percent from a year ago, which speaks to their increasing popularity and functionality, but also points us in another important direction: diversity matters. 

As companies both big and small are generally including the same amount of apps in their repertoire, it makes sense that the company that offers the most varied and applicable sets of apps will be most likely to capitalize on this increasing interest. 

Google Apps is no slouch in this regards, but compared to Office 365, it simply can’t compete. 

Google Apps offers the standard collection of apps that you’d expect most businesses to make use of, along with some niftier programs as well. But when it comes to the sheer depth and breadth of app applicability, you can’t stand up against Microsoft’s arsenal. 

The ability to provide a number of different solutions to companies of all different sizes is key to Office 365’s success, and yet another reason why the company has managed to utterly dominate the cloud app field. 

 

Access to Microsoft Licensing 

 

Another reason that Office 365 is the preferred offering when it comes to cloud application suites is the licensing option that it provides. 

Many companies (as high as 20% in some industries) tend to use both Google Apps and Office 365. Why? The reasons vary. The most common answer is that different departments work better with different products. 

But a big chunk of respondents in the Okta’s Business@Work2016 Report survey, 30%, claimed that Office 365 is a great way to keep Microsoft Office updated. The desktop licensing is another boon to the Office 365 side of the divide, and interconnectedness of the many Microsoft programs helps again to push its set of cloud apps above the competition. 

Of course, some companies went so far to say that the only reason they were using Office 365 was for the licensing, so there a few businesses that prefer to use Google Apps versus the Microsoft equivalent but keep Office 365 around for ancillary benefits, which skews the results a little bit. 

But that number is slim, and ultimately this is another case of Office 365 simply having more to offer due to the stronger base of Microsoft goods that benefit from connectivity with Office 365, while Google Apps don’t necessarily have that benefit. 

 

The Full Range of Microsoft Benefits

 

You’ll being noticing a theme here before long – Microsoft may not pound-for-pound have the better apps in every single instance, but it maintains its market dominance by simply bringing more to the table than Google Apps can muster. 

Microsoft Azure, a very fast growing app WHAT DOES IT DO? Is another reason that companies are likely to stick with Office 365 over Google Apps. 

The new addition of cloud offerings and improved legacy programs helps keep the Microsoft train running strong. 

 

Microsoft Is Going All-In on the Cloud

 

Microsoft CEO Satya Nadella wrote in his first letter to his employees that “[o]ur job is to ensure Microsoft will thrive in a mobile and cloud-first world.” And those efforts are yielding results. 

In the past year, adoption of Microsoft’s cloud applications (primarily Office 365) by Okta customers grew by 116%.

The point is that Microsoft is angling to be one of the top players in the cloud application game. As such, they’re naturally putting a lot of resources and effort into creating the best offering that no other company can rival. 

It’s important to remember where Google and Microsoft each earn the vast majority of their respective revenues. For Google, its main revenue stream is the result of its extensive advertising empire through its search engine. And that makes sense. After all, Google is first and foremost a search engine company, the biggest in the world with dominant market shares across several continents and regions worldwide. 

Microsoft, conversely, sells software. That’s not their only revenue stream, of course, but it is a major one. Considering that Microsoft Suite along with Windows and other programs are huge drivers for the business, it lays out the stakes for the company more clearly. Google doesn’t need Google Apps to be the most popular cloud service set in the world in order to maintain its share price. 

Microsoft has a much higher stake in ensuring that it keeps control of this market because it’s simply a bigger part of its business. 

With this in mind, the company is more likely to pour intense research, resources and investment into Office 365 and other companion products. 

Which isn’t to say that a behemoth tech company like Google can’t match the resource dedication, but the fact is that Google doesn’t have to, nor is it likely to put as much focus on its cloud offerings versus Microsoft. 

 

Works Better as You Scale Up

One of the biggest divides between Microsoft and Google in this space has to do with the size of the organization. 

Office 365 is used by more than 80% of the cloud email market in organizations with $10 billion in revenue, while Google’s cloud email among smaller companies with revenues under $50 million is almost 50%. 

The ubiquity of Outlook across multiple platforms and compatibility with said platforms makes it an ideal choice for larger companies, and as such it has dominated that area of the market.  

 

Microsoft Is All In on Office 365 

 

One of the biggest boons to Office 365 over Google Apps is the dedication Microsoft has showed to continuing the development of its cloud management system. 

In the company’s 2016 annual report, Microsoft continually expounds the virtues of Office 365 and how it is one of its “pillars” in of a primary ambition to increase productivity. 

“Office 365 is changing the nature of work for individuals and teams,” the report says. “Customers love the power of Office on Windows and Mac as well as their iOS and Android mobile devices. In fact, Office is on more than 50 million iOS and Android monthly active devices, up more than four times over last year. Industry analyst surveys report that in cloud email, Microsoft is the clear choice. 

“And we continue to see great momentum as innovative companies like GE, Facebook, Hershey, and Discovery Communications adopt Office 365.”

With a reported 70 million-plus people using Office 365 every month, the suite has clearly presented itself as the premier cloud management service in terms of market dominance, at least for the time being. 

 

The Endgame 

 

There is a lot to like about both Google Apps and Microsoft Office 365. Both are services for companies looking to take full advantage of the cloud, and both offer a number of overlapping options that will appeal to different user bases depending on a wide variety of factors, taking into consideration everything from personal taste to the type of business you’re running. 

At the end of the day, both are great products, but Microsoft is winning out due to a couple of core, foundational assets that Google has yet to match. These include Microsoft’s legacy, its technology, its familiarity and its company culture when it comes to these types of products. 

For now, Microsoft Office 365 has a firm hold on the market that doesn’t appear to be waning. While Google Apps continues to make a case for itself, for now at least, Office 365 is the dominant cloud computing service offering. 

 

Author Bio - 

Brooke loves surfing through social media, so she made it a full time job and works as a social media manager at Entrance Software Consulting Company. And loves all things Tech. When not working, she eats and sleeps, in that order.

Linkedin - https://www.linkedin.com/in/brooke-campbell-301252131/

Twitter - https://twitter.com/Brookhee

 

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