Earlier this month, during Microsoft’s Worldwide Partner Conference in Toronto, Facebook's CIO Tim Campos announced that the company’s staff of 13,000 employees uses Microsoft Office 365.
"Do you want to know why we chose Office 365? It's because of Microsoft," Campos said in a video. "Microsoft got cool again."
In the past, as the rest of the technology industry leapt forward, Microsoft’s progress seemed to stall and analysts were unsure whether the company would remain mired in its old ways or join the digital revolution.
Today, it seems it’s the latter, and a lot of it has to do with Office 365.
"Microsoft is transforming the company from a traditional software vendor to more of a cloud-based, SaaS model, and Office 365 is a big part of that story," said David Hood, director of technology marketing at Mimecast.
Indeed, Office 365 is proving extremely popular among businesses of varying sizes. More than 50,000 organizations are moving to Office 365 each month and four out of five of the Fortune 500 now use Office 365, according to Microsoft. In total, Microsoft says there are now more than 70 million corporate users on Office 365.
A known entity
Gartner analysts say the popularity of Office 365 may be due primarily to the fact that many companies already have history with Microsoft and may be wary of making drastic changes.
"What sets Office 365 apart is its dominant position and familiarity that end users have with the software," said Hood. "There is no learning curve."
But Microsoft has faced stiff competition in the enterprise cloud-based productivity tool market from Google, though it still appears to be winning.
More than 80% of companies with revenue above $10 billion with cloud email use Microsoft, according analysis from Gartner. Google, on the other hand, has focused primarily on marketing to mid-market companies with up to 3,000 employees. Around 50% of companies with less than $50 million in sales use Google, according to Gartner.
"Email is the number one reason that organizations are adopting Office 365, which plays right to the strengths of Microsoft," said Hood.
The battle between Microsoft and Google has continued as each company has worked to attract enterprise customers. Last October, Google said it would offer Google Apps for Work for free to companies while they are finishing out current enterprise agreement with other providers, and offer data migration and training tools as well. Later, Microsoft said it would extend a service called FastTrack—which was previously only available to larger companies—to small and mid-sized businesses. The service helps businesses migrate to Office 365 and onboard users.
Microsoft’s momentum
Though Office 365 is now delivered via the cloud, the foundation of the suite is still rooted in "old" technology. Regardless of all the new and disruptive choices users have today, the traditional Office suite of applications has stood the test of time.
"That a company like Facebook needs Office 365 says that the ‘old way’ of doing business is still very much alive," said Hood. "The fact that Office 365 allows organizations increased mobility and ease-of-access is important. But, overall, it’s validation that email is still a top communication channel for business and that isn’t going to change anytime soon."
So while organizations like Amazon, LinkedIn, SalesForce and Google have captured the world’s attention, those companies have primarily either focused on consumers and built massive businesses very quickly or have proved that SaaS business models work and are valued by the street. In the long run, Microsoft didn’t miss the boat after all.
"Microsoft is reinventing the company right now, and it’s pretty exciting," said Hood. "The company is changing their revenue stream to becoming far more predictable by moving to delivering services instead of software."
