Microsoft Finally Reveals How Well Its Google Apps-Killer Cloud Is Doing

steve ballmer microsoftSteve Ballmer

Microsoft has finally, cautiously, given a few statistics about how well its Office 365 software-as-a-service cloud is doing.

Office 365 is Microsoft’s cloud version of its popular Microsoft Office suite aimed at businesses.

It is also its answer to Google Apps. Google has big, aggressive plans for Apps. In December, Amit Singh, head of Google’s Enterprise unit said that Google plans to grab the 90% of Microsoft Office users who don’t need the advanced features of Office.

Microsoft is battling to keep those customers. In the past few months it announced a lot big customer contracts for Office 365. But it wouldn’t say how well Office 365 was doing overall.

On Thursday, Microsoft CFO Peter Klein told Wall Street analysts that “One in four of our enterprise customers” are now using Office 365 and that it is on a “$1 billion annual run rate.”

A $1 billion annual run rate is a much less than the cash cow of Microsoft Office. The Business Division reported $6.3 billion this quarter alone, with 90% coming from Office products, including Office 365. Excluding the ~$1 billion attributed to Office 365, Microsoft Office generates over $4 billion this quarter.

Still, if one-quarter of Microsoft’s enterprise customers have already adopted Office, Google isn’t exactly eating Microsoft’s lunch, either.

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