Microsoft: Google's Cloud Productivity Play Is 'One Size Fits None'

Microsoft is pulling no punches in its contentious cloud combat with Google, calling its chief cloud computing rival a trumped up advertising company and saying its solutions miss the mark.

Microsoft is fanning the competitive flames as the software giant preps for the official release of Microsoft Office 365, its cloud productivity suite, which is currently in public beta and receiving high praise from cloud-conscious customers and industry insiders. Microsoft expects Office 365 to be commercially available this year.

Microsoft Office 365 comes on the heels of Office 2010, which has been a boon for the Redmond, Wash.-based mainstay, said Tom Rizzo, Microsoft Online Services senior director, in an interview. According to Rizzo, Microsoft sells one copy of Microsoft Office 2010 every second and businesses are deploying it five times faster than Office 2007. Additionally, Microsoft's online services like SharePoint, Exchange and Lync, which comprise Office 365, have grown by double digits year-over-year.

And since Office 365 went into private beta, which Rizzo said was over-subscribed within 24 hours, more than 100,000 users have signed up, representing more than 2.5 million seats. Among those who entered the Office 365 private beta, roughly 70 percent are small businesses.

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"Small businesses, the move to the cloud is quicker for them than the enterprise," Rizzo said.

Office 365's brisk momentum, Rizzo said, has its main competitor, Google and it's Google Apps play, "waving the white flag" of surrender and admitting that Google Apps will not displace Office, but instead will work in concert with it.

Rizzo said Google is now promoting its integration with Office, with tools like its Google Apps Sync for Microsoft Outlook plug-in and its Google Cloud Connect for Microsoft Office, which integrates with Office to put documents and files in the cloud.

"I think they are waving the white flag and saying 'We are not a replacement for Office,'" Rizzo said, adding, "What do Google Apps and Office users have in common? They both use Office."

Rizzo pointed to Microsoft's own research found that among 90 small and mid-sized companies that use Google Apps, nine out of 10 use Google Apps in parallel to Office. Rizzo also cited Gartner research that found only 1 percent of Gartner clients used Google Docs. Meanwhile, Forrester Research surveyed 150 IT decision makers about Microsoft Office alternatives and found that only 3 percent have implemented or are implementing Web-based Office alternatives like Google Docs and Zoho, while only 10 percent are piloting or experimenting with them.

"Google is struggling," Rizzo said, noting that Google recently changed its free Google Apps package from 50 users to 10 users. "They're feeling pressure in the market to try to make money with Google Apps."

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Google, however, refuted Microsoft's claims, and said Google Apps and its cloud offerings are experiencing steady growth and implying that Microsoft's concern is flattering.

"If we were struggling Microsoft wouldn't be talking about us all the time," Google Enterprise spokesperson Andrew Kovacs said in an e-mail to CRN. "We're focused on building great products for our customers and measure ourselves by their feedback. So far it seems they like what they see: our business adoption has tripled over the last year, and more than 90 percent of companies choose to renew each year."

But according to Rizzo, Google recently upped the price of Google Apps from $50 per user per year to $5 per user per month, a total increase of $10 per user per year, or $60 for each user annually. Office 365 will run $6 per user per month, a total of $72 per user per year, Rizzo said. Microsoft has also warned users of a hidden "Google Tax" where customers pay more to get the most out of Google cloud deployments.

"For the price of a cup of coffee you move from Google Apps to Microsoft technologies," he said adding that users will say "'I won't buy my Starbucks today, I'll buy productivity with Microsoft technologies.'"

And Rizzo said users are willing to pay a bit more to get a more complete solution. He said it's impossible to compare Exchange and Gmail and SharePoint and Google Sites and many users are wooed to Google by the low cost, but eventually "have buyers' remorse."

And for partners, Rizzo said, there isn't a solid business model to sell Google Apps. Many users opt for the free version, leaving partners to battle to make a buck. Microsoft, however, has a mature partner model in place that offers support and financial incentives.

Rizzo said Microsoft beats out Google in functionality. "The ratio of price to value: We destroy Google Apps," he said. Microsoft also offers enterprise-class support, which many Google Apps users don't receive. And Microsoft offers tighter security, Rizzo said.

"We've been in the cloud a long time," he said, and Microsoft also has a legacy of on-premise software to give productivity users a choice. With Google, he said, its cloud or nothing, or "one size fits none."

Overall, Rizzo said, the Microsoft's and Google's battle for the cloud and the cloud channel will come down to trust. And Microsoft's history and proven track record will put its name in the win column.

"Who can you trust?" Rizzo asked. "We're in the business of productivity. They're in the business of advertising."