Can Google, Cloud Alternatives Displace Microsoft?

The cloud e-mail and cloud productivity dustup between titans Microsoft and Google shows no sign of stopping as the two companies' cloud computing offerings have become the subjects of several recent surveys and studies, the newest asking if Google's Gmail can really displace Microsoft Exchange.

In a recent survey, cloud application migration player Exoprise asked 180 people what e-mail system their businesses currently leverage. "Exchange reigns supreme in organizations of all shapes and sizes. Fully 97 percent of respondents report Microsoft Exchange as the current e-mail system," the Exoprise cloud e-mail study highlights. That 97 percent is spread among on-premise Exchange 2003, 2007 and 2010 and all forms of hosted Exchange, the survey noted.

"This battle for enterprise messaging is going to get even hotter, and more dynamic, when Office 365 goes GA this summer," Jamie Watt, Exoprise vice president of sales and marketing wrote in a blog post highlighting the survey results. "Will Microsoft's somewhat late to the game cloud-play be good enough to defend their position as king of the hill in business? Will Google be forced to innovate even faster?"

The survey found that the both Google and Microsoft are fairly evenly matched when it comes to user perceptions of cloud-based e-mail systems. When asked which cloud e-mail platform users consider to be a viable alternative to their current on-premise systems, Google's Gmail for Business edged out Microsoft's Business Productivity Online Services (BPOS) and Microsoft Office 365 by a few percentage points. Google and Microsoft handily beat out VMware Zimbra and Rackspace Hosted E-mail.

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Exoprise's cloud e-mail survey comes on the heels of other recent surveys examining where users will take both their e-mail and productivity suites when they make the leap to the cloud.

Exoprise's survey comes as Microsoft and Google battle viciously for cloud computing customers in all industries, especially government. Just last week, Microsoft added the city of San Francisco to its list of cloud customers, beating out Google and IBM, though Google claims the contract wasn't open to a competitive bidding process. At a summit in Sydney earlier this month, Gartner noted that just one percent of its clients were using Google Docs at the end of last year and Microsoft Office was still the main choice for productivity apps, whether on-premise or in the cloud. According to Gartner figures, Microsoft Office 2003 is still used by 57 percent of Gartner survey respondents, while Office 2007 is in use by 39 percent.

"About 2 percent of businesses in the installed base are planning to run Google Docs by the end of this year," Gartner analyst Annette Jump said during a presentation, LifeHacker Australia reported. "In many cases those are not run as a replacement for Office, but as an additional resource."

NEXT: Is Google The Biggest Microsoft Alternative?

Meanwhile, a Forrester Research study revealed that users aren't necessarily flocking to Microsoft Office alternatives, but alternatives are creating an interesting shift in the market.

According to Forrester's findings, among 150 IT decision makers 44 percent are "somewhat" interested in Web-based, or cloud, alternatives to Microsoft Office including Google Docs and Zoho. But while the interest is there, just a quarter of IT pros are actively looking or piloting a cloud-based office alternative and only three percent have implemented some Web-based productivity suite like Google Docs.

And despite users taking an interest in alternatives to Office, Office still remains in place, Forrester analyst Matthew Brown wrote in a blog post examining the presence of Office alternatives.

"Of the respondents to our survey who have deployed an office productivity alternative at their company, every one also supports some version of Microsoft Office -- reinforcing the view that alternatives actually serve as replacements for specific segments of the workforce (e.g., browser-based alternatives for users with basic needs, WordPerfect for legal pros)," Brown wrote. "For other segments, they're complementary tools used to enrich older versions of Microsoft Office with collaboration features. The alternatives vendors themselves acknowledge that they don't seek to fully displace Microsoft on the desktop."

For Google's part, the company has added integration features to its Google Apps cloud productivity suite to make it more compatible with Office. Google Apps now offers the 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.

In its own research, Microsoft found that among more than 90 small and mid-sized organizations that use Google Apps, nine out of 10 of them use Google Apps alongside Microsoft Office. Meanwhile, two in five companies surveyed used Google Docs while two out of three use Office as their primary production applications.

Still, Forrester's Brown wrote, Microsoft should be wary of its cloud rivals and other Office alternatives, but as yet there hasn't been much displacement.

"While their market presence remains low, the alternatives' impact on Microsoft Office upgrade cycles is more significant," Brown wrote. "With more choice, Forrester finds productivity decision-makers delaying Office upgrades as they evaluate the alternatives as part of the sourcing process. Increasingly, we find that clients are using the very presence of alternatives as a way to gain leverage in Office upgrade negotiations. We expect the role of office alternatives in the market only to grow as vendors make improvements to close the functionality and compatibility gap, and as buyers continue to show interest in cutting costs by provisioning differently to different types of users."