Here’s another good sign that a key part of Microsoft’s cloud-software strategy, Office 365, is a hit with enterprises.The company just signed a $9.8 million, four-year contract with the Environmental Protection Agency.
At the agency, 25,000 employees will now use Office 365, Microsoft’s answer to Google Apps.
Office 365 if a cloud-based alternative to running Microsoft Office on PCs. This is software as a service, so companies pay a monthly fee for each employee that uses the cloud.
The EPA hired Lockheed Martin to help it move all those PCs to the cloud. It’s not always an easy matter of just deleting the old software and firing up a Web browser. Older emails, calendar events, documents, and custom forms built with Office software like Excel all have to be moved to the cloud, too.
Even so, the EPA claims that it will save $12 million by using Office 365 instead of managing its own email and Office software in its data centre.
For Microsoft, big wins like this are super important, and it’s starting to rack ’em up. Earlier this month, Microsoft nabbed a huge Office 365 deal from Toyota to move 200,000 employees. This was a net win for Microsoft since Toyota had been using a rival product, IBM’s Lotus Notes.
Last month, Microsoft grabbed a customer from Google’s own backyard, the government of Santa Clara County with 15,000 employees. (Santa Clara County is roughly coterminous with the tech-industry hub people call Silicon Valley.)
Microsoft hasn’t released revenue figures for Office 365 (or its other cloud service, Azure, which runs websites and mobile apps for other businesses). It still bundles Office 365 revenue in with its PC-based Office products, as part of the Microsoft Business Division. Last quarter, that division’s revenues were down 2% over the previous quarter.
But some analysts are beginning to get pretty excited about Office 365 as a big growth engine for Redmond. Earlier ths month, Bernstein Research’s Mark Moerdler said that Microsoft could beat the $83.1 billion in revenue he’s modelled for its next fiscal year, particularly if things go well for Office 365 sales, reported Tiernan Ray at Barron’s. Microsoft hit $73.7 billion in revenue for fiscal 2012, which ended June 30.