Office 365 set to lead the market

26th September 2013

Microsoft is still benefiting from Office’s pre-existing dominance

A survey by computing.co.uk has shown that, despite only having been fully released this year, Microsoft Office 365 is already set to dominate the cloud-based office software market. Currently, about 20% of organisations use Google Apps with Office 365 just behind, but whilst the Docs functionality of Google Apps has been around in one form or another since 2006, Microsoft’s share of the market has been built up mostly over the last 6 months.

Perhaps even more impressive for Microsoft, however, was the study’s finding that 37% of organisations were likely to adopt Office 365 over the next 24 months whilst only 15% plan to adopt Google Apps.

As you would expect, the study found that the market for cloud-based office suites is currently very small in comparison to the market for PC-based office software. Only 4% of respondents said that cloud-based suites offered enough functionality for end-users compared to over 40% for PC-based suites – but make no mistake, cloud-based software is growing quickly and commentators are already talking about when Microsoft will discontinue its PC-based Office suite.

Cloud-based software offers benefits for both end-users and its providers. For end-users, it means documents can be accessed from anywhere at any time, their documents are always backed-up avoiding any potential loss of data and they are always provided with the latest version of the software. For providers, production and distribution costs are reduced and they can move to a subscription model of pricing, increasingly revenue.

So, the benefits to Microsoft of gaining market share in the cloud software market are clear, but why is it promising such dominance of the market? Well, quite simply, Microsoft is reaping the rewards from bundling Office with Windows for so many years. The preference of businesses for Microsoft’s operating system over any other and the subsequent ubiquity of Microsoft Office in offices meant that Office became the de facto standard by default.

All this is not to say that Microsoft Office isn’t a worthy market leader. As a result of its dominance, Microsoft knows the office-suite space arguably better than any other provider – and users with existing knowledge of Office will find changing to Office 365 very seamless (although migration of company data and optimisation will naturally require expert help).

For businesses, which office-suite to use is entirely down to its individual needs. Google Apps commands a much larger proportion of the small business market than it does the enterprise market – and, indeed, there are free offerings that are perfectly good options. What these offerings don’t have, however, is a reputation that precedes them, which is something Microsoft Office has in abundance.

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