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Microsoft says Office 365 adoption accelerating, but questions remain

Juan Carlos Perez | April 23, 2013
When Microsoft reported its third-quarter financial results last week, company officials trumpeted several metrics about sales and adoption of Office 365, the cloud subscription suite for email and collaboration.

Thus, it's hard to know with precision not only how the suite is being used and to what extent which of its versions and specific components are proving more or less popular, said T.J. Keitt, a Forrester Research analyst. Some customers could be using only one component while others could be using several, he said.

It's also worth noting that Microsoft defines "enterprise customer" as companies with 250 employees or more, so the stat doesn't necessarily give a snapshot of the suite's rate of adoption in very large organizations with tens of thousands of employees.

At Forrester, the definition of "enterprise organization" is one with more than 1,000 employees, Keitt said. Lowering the bar to a minimum of 250 employees allows Microsoft to qualify many more companies as enterprises for the purpose of this stat, he said.

Microsoft has been clear from the start that Office 365, which began shipping in the summer of 2011, has been particularly successful among smaller companies, specifically those with 50 users or less, which account for about 90 percent of its customer base.

"I don't doubt there's growth and interest. Just from what we see in our client inquiries, there are a lot of businesses that are seriously considering Microsoft's Office 365 and Google Apps for cloud collaboration and communication," Keitt said.

Microsoft has also done a good job of publicizing large Office 365 deployments among businesses, government agencies and universities, he said. These featured case studies involve tens of thousands of users, and even in some cases more than 100,000 users.

What's not exactly clear is which type of company is driving the growth. "Is it the midmarket? Or a combination of the midmarket and large companies?" he said.

 

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