Clearing the Atmosphere

On Monday, Google is hosting Atmosphere, their conference to convince CIOs to buy Google Apps. In the run up to the event, they’ve been briefing reporters, and because I’ve been pretty vocal (1, 2, 3) about the gaps in Google’s strategy, I’ve been getting some calls too. Of course, I’m happy to help! Below, I’ll share the four main themes I’m hearing.

1) Is the Office business threatened by Google Apps?
No.  The Office business has never been stronger.  Look no further than our quarterly results.

  • Office 2010 is the fastest selling version of Office … ever. If it were an album, it would have gone platinum more than 100 times.
  • SharePoint, Exchange and Lync all grew double digits last year.
  • Office 365, although it just launched, has more customers in the first 10 weeks than its predecessor did in 2 years.

Our business is doing very well, and we are not seeing Google get much traction.

2) What about all those businesses that are Going Google?
We are seeing few businesses actually deploy Google Apps.  There are plenty of examples in the press and on our web site of those “going Google” struggling when it comes to rolling out Google Apps.  Turns out that advertising a win is different from effectively deploying and supporting customers. 

Even those who roll out Google Apps aren’t replacing Office.  We interviewed more than 90 small and medium-sized organizations using Google Apps across 5 countries and found that 9 in 10 still use Office.  The ultimate example is Google themselves, who still require PowerPoint and Excel in numerous job postings on their web site.  Even Google cannot seem to Go Google!

3) How is Office 365 doing?
Really well, actually really, really well!  Office 365 just launched a little over four months ago.  Frankly, with only four months in market, anything we say, no matter how impressive, would look small in comparison to our other businesses and services, but I can tell you that, based on early results, Office 365 is on track to be the fastest growing product I’ve ever worked on – and I have worked on SQL, Exchange and SharePoint. 

Office 365 has outpaced BPOS, which was no slouch itself, in just 10 weeks, and together with Live@edu and Office Web Apps, more than 80 million people use our cloud productivity services for businesses, schools and individuals.

4) Are you really serious about the cloud?
Early last year, Steve Ballmer announced that Microsoft was “all in” on the cloud.  Today, nearly 100% of our engineers are doing work that contributes to Office 365, and Office 365 is usually the first thing a customer or partner hears about from us.  We recognize that the cloud is the future, and we’re working with our customers to take them there.

We are also realists, and we know that the journey to the cloud isn’t an overnighter for most businesses.  Even e-mail, which is usually the first thing to move to the cloud, is going there gradually.  Gartner Group’s Matt Cain predicts that 55% of businesses will be using cloud-based e-mail in 2020.  What about the other 45%?  We want to support the 55% as they move and the 45% who will still be using on-premises e-mail at the end of this decade.

5) What happens to the customer in all of this competitive play?
Ok, so I said there were four themes.  But, I really wish more people would ask about the real focus here – the customer.

For us, cloud services mean that we can even closer with our customers, and we get more immediate feedback to improve our services and support.

I question Google’s commitment to businesses.  Is their focus really on delivering great business solutions, or is it on protecting their advertising business?  I see the answer in the way they treat customers.

Case in point, just last week, Google announced they were cancelling their BlackBerry Email Client and gave customers just two weeks’ notice.  That is completely unacceptable if you’re a CIO banking on this technology to run your business.

It’s likewise unacceptable to offer an incomplete Service Level Agreement (SLA). With Google Apps, if you are a 25 person company, one person can be without service forever, and Google will report 100% uptime. And, some apps may never work because they are not covered by the SLA. When you’re not focused on your customers, it’s ok to kill features and even whole products on a whim and only partially support them – except that it’s not ok.

In the end, competition is a good thing.  Competition drives people to do their best work, and it moves industries, businesses and products forward.  Facts are also a good thing.  They shine a light in corners of the world that can sometimes be cloudy.