Microsoft is making a major move into the cloud with the launch of its Office 365 service today in a bid to prevent Google Apps from taking any more of its market share.
Being able to access applications whenever and wherever you are is becoming more and more important for businesses and Microsoft’s Office 365 is the company’s attempt to make its highly-profitable Office suite of applications as profitable in the cloud. In recent times some major companies have been shifting away from using Office and moving to use Google Apps. The benefits for companies are obvious - it is cheaper and means no longer having to install software on every PC. Office 365 is Microsoft’s response to the growing popularity of Google Apps and will give users access to a cloud-based version of Microsoft’s email, whiteboard collaboration software as well as spreadsheet, word processing and presentation applications. Prices for access to Office 365 will vary from £4-a-month per user for professionals and small businesses up to almost £18-a-month per user for enterprise packages.
Office is Microsoft’s golden goose, generating 50 percent of its overall profit with each copy sold bringing in a 60 percent margin. Moving to the cloud with these services was a natural next step and one that Microsoft will have to judge correctly if it wants to continue to dominate the sector, as it has done with traditional sales. "It's obvious that Microsoft has to do this if they're going to remain competitive with Google. It’s something they have to do," Michael Yoshikami, chief executive of money manager YCMNET Advisors told Reuters. Yesterday shares in the Redmond-based company rose by 3.7 percent, which was the largest gain since September, based on the hope that Office 365 could boost its profitability.
Google pre-empted the launch today of Office 365 by posting a blog entitled “365 reasons to consider Google Apps”. Among the reasons Google says its offering is superior to Microsoft’s include:
- Office 365 is for individuals. Apps is for teams.
- Office 365 is built for Microsoft. Apps is built for choice.
- Office 365 is about the desktop. Apps is about the web.
According to Google 38,000 businesses have given Google Apps a try in the past week alone and it is figures such as this which Microsoft will be hoping to reverse with Office 365.