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Microsoft Aims For The Cloud

June 27, 2011

In the latest clash of the tech titans, Microsoft is aiming at Google and its cloud-based Google Apps with its own web-based, subscription suite of its productivity software called Office 365, Seattle Times reports.

Microsoft CEO Steve Ballmer will be hosting a roll-out announcement today in New York city for the paid cloud version of Word, PowerPoint, Excel, email and other office applications. Microsoft will primarily be courting businesses with Office 365 with an attractive price of $6 per person monthly.

Last year Microsoft launched Office Web Apps, a free, lightweight web version of Office Suite in hopes of competing with the free and popular Google Docs.

“It is the 2010 versions of server (software) Exchange, SharePoint and Lync “” available as a service. It’s also a subscription version of Office 2010,” said Kurt DelBene, president of Microsoft’s Business division. “We think it expands our business. In our traditional software business, we compete for 15 percent of the total IT budget. We think we can go up to four to five times that with Office 365.”

Microsoft’s business division makes $18.6 billion a year, mostly from selling Office software. Last quarter sales went up 21 percent because of Office 2010.

The two tech giants are both name dropping large customers they have acquired. Google recently said that McClatchy, which owns The Sacramento Bee and other newspapers, is switching 8,500 workers to Google Apps.

Microsoft held news conferences with San Francisco and New York officials when those cities chose Microsoft for their office software.

Winning the hearts of customers through email services for both Google Apps and Office 365 are crucial. Free, seamless email services are considered a gateway to cloud computing which leads to long-term, paid customers.

Group product manager at Google Apps, Shan Sinha, says he’s not worried about Office 365. Google sells the service to companies with more than 10 users for $50 per person annually. This well below the Office 365 subscription of $72 per year.

The Mountain View, Calif., company said 3 million businesses with 30 million users are paying for the service since the company began selling it in 2007. Microsoft declined to say how many customers it has.

Office 365 is exciting for Google, Sinha explained, “It represents the way the world is headed. It’s happening because customers are expecting more out of their technology. They’re expecting less complexity, less hassle.”

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