Spend Matters welcomes this guest post from Jaime Leonard, of GEP.
Over the past few years, we have seen Google become more prominent within the enterprise system space. Essentially, Google Apps for Work has become Microsoft’s largest threat and competitor, especially as companies decide to move toward cloud-based models. Roughly 83% of companies have developed a hybrid cloud strategy within their enterprise. In addition, Gartner estimates that 630 million business users currently use an office suite of tools, and is expecting it to grow to 1.2 billion by 2022. As these numbers continue to rise, we will see more decisions being made to either use Google Apps for Work or Microsoft 365. But how exactly will Google plan to evolve in order to gain additional market share from such a massive industry leader with decades of presence and control? How will they continue to manage their developments in order to sustain growth? Lastly, what is the likelihood that companies will put their trust into an “out of the norm” enterprise product? Let’s take a look at some of these areas and see what it’s all about.
Since Google Apps for Work was founded in 2006, they have come a long way. Google announced that it has more than 2 million paid customers using its Apps for Work platform. Gartner reported that Gmail (Google email) currently holds 50% of the cloud email market share among smaller companies with revenue of $50 million or less. It has also shown that Google apps are less popular with companies with revenue of $10 billion or more, while Microsoft still holds 80% of this market share for cloud email. However, with large companies like Whirlpool, PwC, Uber and Salesforce.com, implementing Google Apps into their environment, this shows definite interest among large scale companies like these. It will be up to Google to execute a strategy to attract more of these players.
Having a clear, defined and simplistic approach to a successful strategy is the “Google way” and that is just what Amit Singh, the former head of Google Apps for Work, has discussed. In an exclusive interview, Singh told Business Insider about the major areas his team will be working on in the hopes of luring away some of Microsoft’s larger customers. These revolve around developing apps that have 85%–90% of the functionality of Microsoft Office. Singh feels that only 10% of power users actually care about the missing 10%–15% of functionality.
The next part of Singh’s strategy is to sell a hybrid approach and not necessarily push customers to fully integrate to Google Apps. Microsoft Office may still be needed by certain departments, and often this is a major concern for organizations. It gives them more comfort knowing they can create a hybrid model and still realize great gains. Being able to open and edit Microsoft documents is also a great concern for organizations. Google has made this easier by acquiring Quickoffice, which allows for light editing of office documents. Google has continued to develop more advanced functionality for this app to ensure complete flexibility. Singh believes that keeping customers interested by offering new innovations is also critical for retaining customers and encouraging more dependence on the products.
The last area that Singh has noticed is the mobile world we live in. Creating apps that are completely mobile friendly will allow for easy use by those customers who are constantly on their mobile devices. The simplicity behind these strategies may seem obvious, but it is highly important when relating to trends in our society today.
So how exactly do Google Apps and Microsoft compare in terms of cost and capability? Google has created a very flexible and friendly approach when it comes to a contract. To start, the contract can be month to month, which is great for companies with commitment issues. They have two plans: the base plan is $5 per user, per month and an upgraded plan with unlimited storage and advanced features is $10 per user, per month. Microsoft 365 requires, at minimum, a one year contract, while offering five different plans, ranging from $5 to $35 per user, per month. The biggest differences among the Microsoft plans are the options for storage and advanced features. Google Apps consists of Gmail, Docs, Sheets, Slides, Drive, Hangouts, Forms, Sites, Vault and Admin, which are cloud-based apps. Microsoft 365 includes Outlook, Word, Excel, PowerPoint, Access, OneNote and Publisher, which can be cloud based or downloaded to your computer.
Google’s biggest advantage over Microsoft is seen through the real-time configuration, which creates more efficiency within an organization and eliminates multiple versions of a document. Users can instantly see the changes to a document made by another user. Microsoft does have a similar configuration, but it is not as simple or efficient as Google’s. Gmail has also gained a lot of popularity due to its easy to use functionality for users, making it very simple to manage compared with Outlook. However, Outlook does have more capabilities and provides a far more advanced calendar option that makes it attractive for users, especially within an organization. Microsoft’s biggest advantage is definitely with Excel. This has always been a make or break for companies who cannot wrap their minds around operating without it — especially for Excel power users, who take advantage of its true potential. Google Sheets is functional for those who are not power users; however, it does lack many of the advanced capabilities that Excel offers users. Just through a light comparison of some of the offerings, there are attractive characteristics for both products.
At the end of the day, it is truly up to the decision of each enterprise. However, in the direction Google is heading, Microsoft should be very concerned not just because of the continuous development and capabilities but also because of forecasted trends. Google has been able to offer companies great financial incentives and credits for customers who are interested in integrating Google Apps, which is driving a very competitive campaign. As we progressively evolve to a more cloud-based model, organizations will look to utilize strong contenders in this space. Expect Google to put up a fight in the short term, capitalizing on this growing space and capturing the business of some key, large-scale organizations.
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