Microsoft Office 365 Steps On Google Enterprise Ambitions

Office 365 could soon be a $1 billion annual business, but Microsoft is still playing proactive defense against Google Apps.



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Microsoft endured criticism earlier this year when its customers perceived unappealing Office 2013 license terms as a strong-arm push toward Office 365 and its subscription-based delivery model. This tumult has since died away, not only because Microsoft amended the Office 2013 terms , but also -- and more importantly -- because Office 365 has become, along with Azure, one of the company's biggest success stories of the last year

On Monday, Microsoft added several new customer testimonials to this positive momentum. Killing two birds with one stone, it also fired a few shots at Google Apps, continuing a recent stretch of proactive attacks against Google's enterprise ambitions.

In a statement, Microsoft emphasized that several of the profiled customers are subject to regulatory requirements, such as HIPAA. Many companies are hesitant to entrust their data to cloud-based products, and though cloud vendors are making progress, Redmond is clearly attempting to stake out territory as the secure cloud for businesses.

FHI 360 was one of the companies that chose Office 365 in part for its regulatory prowess. A nonprofit human development organization, FHI 360 arose through the union of two smaller nonprofits: FHI, which utilized Microsoft Exchange on-premises, and AED, which relied on Google Apps.

In an interview, Douglas Wilkins, the organization's associate director of operations infrastructure services, said FHI 360 opted for Office 365 because the service could, unlike Google's offering, facilitate a hybrid model in which Active Directory and a number of applications are hosted locally by the nonprofit, while other documents and resources are stored off-site by Microsoft. Office 365 offered richer offline access as well, he said.

[ For more on transitioning to Office 365, read Google Apps To Office 365: Why To Switch. ]

"We were looking for a way to do not just email but instant messaging, Web conferencing, document sharing and collaboration," said Wilkins, who also said Google Apps fulfilled a "portion" of his needs but offered neither the on-premises flexibility nor the regulatory compliance of Office 365.

Wilkins also noted the value of Office 365's videoconferencing and instant messaging capabilities, tools that Microsoft said will save FHI 360 approximately $20,000 annually. He also said that by allowing Microsoft to manage patches and other features, FHI 360's IT staff had had more time to focus on business opportunities. The subscription model also permits the organization to flexibly activate or shut down licenses as staffing needs change around certain projects, Wilkins said.

Though stories such as FHI 360's emphasize the diverse benefits Office 365 can deliver, Microsoft also presented most of the testimonials to highlight Google Apps' relative deficiencies. It noted that Arysta LifeScience, an agrochemical company with sales and services in 125 countries, initially adopted Google's suite, but switched to Office 365 because employees were "unhappy" with Google's shortcomings, such as limited calendar-sharing functions and watered-down offline access.

This anti-Google messaging follows three recent blog posts -- one on May 13, and two on May 10 -- in which Microsoft representatives have opined on the ways Office 365 outshines its competitor. The emphasis is somewhat curious; Microsoft enjoys a near-monopoly in this market, so much so that terms such as "dominant" don't do it justice. That said, if any competitor has nibbled -- even moderately -- into Microsoft's sales, it's Google Apps.

Redmond, by turning Office to a cloud-oriented model, has successfully addressed -- at least for many businesses, if not also for some consumers -- one of the product's most glaring criticisms: Because earlier Office versions are adequate for most workers' needs, updates have become increasingly less necessary. Office 365's features have challenged this contention, and it remains likely that additional Office enhancements are coming. One can only assume that attempts to dismiss Google Apps before they pose a real threat are just another part of Microsoft's efforts to keep its flagship productivity products relevant in the so-called post-PC era.

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