Cloud-based office suites are revolutionizing the way we create and share data. They enable everyone, from the small business owner to the large corporation, with productivity tools formerly reserved for desktops, tools that can be used from virtually any location, on practically any device.
It’s the kind of solution companies have been dreaming of for ages.
The big question is: do cloud-based office suites really compare against the traditional, tried and true standard of Microsoft Office, and will they replace the dominate player?
According to IT research firm Gartner, the migration is happening, if not at a far slower rate than many believe. It recently reported that cloud office suites currently represent eight percent of the overall office market. However, if predictions hold true the first half of 2015 should see the beginning of a major shift that will bring the percentage of cloud-based office suite users to 33 percent by 2017. By 2022, that number could be as high as 60 percent.
TechnologyGuide talked to a couple of insiders to get their opinions.
Microsoft Showed up Late to the Cloud
Raju Vegesna, Chief Evangelist for Zoho Corporation, makers of the cloud office suite Zoho, believes the future of workplace productivity lies in cloud-based office suites, and doesn’t see Microsoft remaining a player in the game much longer.
“I don’t see Microsoft Office retaining its market share,” Vegesna said, intimating that Microsoft Office’s obsolescence is a foregone conclusion.
To back this up, he points to the global proliferation of smartphones and tablets that operate on non-Windows systems, which he says have caused Microsoft’s share to plunge dramatically.
“Given the advantages of online office suites like Google Apps and Zoho, I don’t think Microsoft Office can sustain itself. It’s not about the desktop anymore. It’s about online connectivity. It’s about mobility. It’s about the ability to be productive on tablets and smartphones.”
While Microsoft’s late entry into the world of online office suites, Office 365, may help it to regain some of the traction it’s already lost to cloud competitors like Zoho and Google and compete in the future, it won’t be as easy as leveraging its popular brand, and it’s still a pricey option. The monthly enterprise level subscription fee of $20 per user is steep, and this could be what causes corporate decision makers to look elsewhere for their mobile productivity needs. Office 365 does offer lower tier pricing starting at $5 per user per month, but that particular service caps out at a maximum of 25 users and isn’t mobile compatible.
Inexpensive Options for Business
Zoho and Google are eager to snatch up business left and right by offering a far more inexpensive service than Microsoft. Staring at $5 per month for each user, Zoho’s premium package comes with 1TB of storage for email and data. The basic Google Apps business package costs the same, but data storage tops out at 30GB and businesses have to pay extra for additional space. Then there’s Apple’s contribution, the soon to be released iWork for iCloud beta, which Apple is now offering free to all customers with the purchase of a new Apple device.
Vegesna points to these significantly lower costs as one thing that will play a huge part in the decision of businesses to opt for non-Microsoft cloud office suites. “Users of online office suites are going to be saving a lot of money when it comes to licensing,” Vegesna said. “Back in the old days, it kind of made sense to pay $500 for your office suite when the cost of your laptop was $5000. Now that the cost of laptops has dropped so dramatically, it no longer makes sense to pay $500 for an office suite. $50, yes. But not $500.”
The Office Advantage
But Microsoft Office, and Office 365 have distinct advantages, notably, compatibility with an office and IT infrastructure already built around Microsoft products, and user familiarity with the product. That’s key, according to Gerry Purdy, Chief Mobility Strategist with Compass Intelligence,
“The data standard is first,” he also stressed. “If you had someone offer you a cloud service for $1.95 per month but it wasn’t compatible with Office, you’d laugh. You have to have that data compatibility.”
“If they do consider migrating, they not only have to ensure data compatibility, but also user satisfaction,” Purdy claimed
Vegesna also agreed with Purdy that the end user plays a key role. Asked what he thinks the greatest challenge will be for companies transitioning from Microsoft Office to cloud-based office suites, Vegesna cited psychology.
“The biggest challenge will be mindset,” he said. “For example, users will have to learn to share documents instead of emailing them. There are many small things that people will have to get used to.”
Purdy believes these factors have combined to bring about a showdown between the titans of office productivity. “There’s a war being waged between Google, Microsoft and Apple over the way businesses perform office related activities.”
“You’ve got apps created by Apple that are data compatible and that are meant to work well on mobile devices. Then you’ve got Google Apps integrating Quickoffice capabilities so that any Android device can easily access and update an Office document.”
“Not that Microsoft is going to go out of business,” he later added, “but I think there are some big players that are very serious about where they’re taking this.”
Is it the End of an Era for Microsoft?
The numbers suggest he’s right. Microsoft is not going out of business. Last quarter, labeled a disappointment by analysts, saw Microsoft still bring $19.9 billion in revenue, and $4.97 billion in profit, buoyed by growing demand for Office 365 and Microsoft Office upgrades.
“I don’t think many large companies are going to migrate completely away,” Purdy said. “Rather, many of them may use some cloud-based office suites that are compatible with Microsoft Office for some situations or projects.”
He added, “With basic Office on iOS and Android, there’s less of a driving force. For users who want cloud storage, Microsoft offers Skydrive for personal and small business and Sharepoint for enterprise file sharing.”
Want to find out more about how cloud computing can help to ease your work life? Check out the “Working in the Cloud” series to learn more.