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Why Microsoft will beat Google in the enterprise cloud war

Matt Kapko | Dec. 11, 2015
Google beat Microsoft to market with its cloud-based suite of business apps, but the tables have turned and many organizations, particularly large enterprises, are now looking to Microsoft for their cloud needs.

Microsoft's strengths are particularly appealing to Forbes Global 2000 companies, according to Keitt. "That's usually where you start to see a break in interests between Google and Microsoft," he says. "Those very big companies are interested in Microsoft more than Google because of deployment flexibility, as well as hybridization capabilities." 

Thompson says Keitt's conclusions align with her research and suggests Microsoft's approach is twofold, because it caters to companies that want to transition to Office 365 for email, as well as organizations looking to mobilize existing desktop apps that they want to continue use.

Google, however, targets companies looking to move completely to the cloud, according to Thompson. Google provides offline access to some of its products, but it can't match the functionality and IT control enabled by Microsoft. 

Despite Google's earlier entry in the enterprise cloud market, it simply can't compete with Microsoft in a number of areas, according to Keitt. Google's technology was developed for use by consumers and then repackaged for business with a set of administrative consoles and IT controls, he says. Google also offers no enterprise equivalent to SharePoint, Yammer or machine learning. So "[i]t's not an apples-to-apples comparison across the board."

Last month Google said more than 2 million businesses pay to use Google for Work, and that suggests Google is still has more total customers, according to Keitt. But Microsoft owns the majority share of big business. "There is a fierce competition in smaller companies between Microsoft and Google," Keitt says. "I would say that Microsoft probably has a pretty good lead in larger companies around Office 365."

Google won't go out without a fight

Google is running promotions to steal away enterprise customers from its competitors. The company kicked off an initiative last month that lets businesses under other providers' contracts use Google for Work apps at no cost for the remainder of those license agreements. The move is part of a smart competitive strategy that could pay off in the SMBs market, according to both Keitt and Thompson. However, for most businesses, the choice between Google and Microsoft comes down to specific employee needs, as well as how frequently their employees use Microsoft Office.

"If your organizational policy is flexible enough to allow users to pick up standalone apps alongside suites then this might appease users and let them have more choice in the applications they use to get their work done," Thompson says.


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