Two very good reasons why Microsoft should be scared of Google Apps

As Microsoft continues to push Office 365, its subscription software-as-a-service offering, a new survey underscores Redmond’s diminishing hold on enterprise users. And tjhe problem will only get worse as younger users enter the workplace, if a recent study at Princeton University is any indication.

BetterCloud sells cloud management tools for Google Apps. In early February, BetterCloud surveyed its customer base -- 18,361 Google administrators – and received responses from 2,719.

There are a lot of interesting data points in the survey results, but here are the ones relevant to Microsoft and its growing struggle in the enterprise:

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• 60% of respondents say their organizations are minimizing further investment in Microsoft Office
• 64% who have been using Google Apps for at least two years are minimizing further investment in Office

OK, you might say. Many, maybe even most, of the respondents likely come from smaller businesses. Large organizations with a lot invested in licenses for Office software and a workforce hooked on Excel, PowerPoint, Word, and other Redmond apps understandably would be more willing to stay the course.

But 62% of respondents from enterprises with 500 or more employees said they also would minimize further investment in Microsoft Office. So the growing lack of commitment to Office products cuts almost equally across all enterprises.

"The survey suggests that a significant number of businesses are simply trying to escape the endless and costly Office upgrade cycle," Charles King, president and principal analyst of Pund-IT, tells CITEworld. "The classic reasoning still applies -- Office is too feature-laden and complex to qualify as a common productivity suite. It’s a bit like one of those 200 piece Sears tool sets -- great if you’re opening up shop as a mechanic but over the top if you just want to replace a light switch cover."

And the future isn’t promising for legacy Office software. The newest and incoming enterprise workers are about more than BYOD – they expect to bring in and use their own apps and productivity tools, which almost invariably have to be accessible on multiple devices. And that means a cloud approach.

Google knows this. So does Microsoft, now. That’s what Office 365 is all about – Redmond’s bid to grab a piece of the emerging cloud-based enterprise productivity market. But Microsoft is being forced to fight away from its home turf, and it’s at a disadvantage.

"Google Apps have continued to measurably improve," King says. "In fact, it's interesting to note that some of Office 365's key features -- including integration with outlook.com web mail and Azure cloud storage, ape well-established Google offerings."

There's another data point from BetterCloud that spells trouble for Microsoft: 95% of respondents to the BetterCloud survey said more than half of the employees in their organizations use Gmail.

This makes Gmail the number one Google app in the enterprise (followed by Calendar at approximately 85%), according to the survey. And as BetterCloud argues, “Email is where the battle for the enterprise is won or lost.”