Despite Google’s occasional big wins in the enterprise and government space, Microsoft says it’s not really worried about Google Apps.
Tom Rizzo, Microsoft’s senior director of online services, pointed to two companies who found Gmail and Apps to be such a pain that they switched to Microsoft services instead: Aisle 7, a small supermarket advertising company, and Vinci, a multinational construction company.
Microsoft has been flogging these and a handful of other switchers for months, and Google’s gone on to win plenty of contracts since then. But Rizzo is confident that Microsoft will win as companies move email and other services to the cloud. Here’s why:
- Google lacks basic functionality. “No real Office user will go to Web Apps,” said Rizzo. “It’s 15 years behind the times.” He also claimed that other basics are missing in obvious areas like calendaring and IT manageability.
- Financially backed service-level agreement. When Google Apps fails, Google gives customers more free time on Google Apps. When Microsoft’s cloud services fail, Microsoft gives customers some of their money back.
- Phone support. Microsoft offers 24×7 phone support for its online services. Google won’t let smaller customers call unless there’s an outage that affects more than 50% of their users.
- Privacy. Rizzo noted that Google shows users of its free services advertisements, and collects data about them to target those ads. Of course, so does Microsoft for the free version of Office Web Apps. Neither company shows ads to its paying customers.
The public display of confidence doesn’t match the word from many contacts inside and outside the company, who say that a threat from a customer to go Google Apps was the number-one cause of “sales escalations” in 2009 and early 2010. Think emergency calls to higher-ups in the Microsoft sales force.
That’s because this is Microsoft’s business to lose. The company books an estimated $3 billion to $4 billion selling Exchange (email) and SharePoint (collaboration and intranet), and another $12 billion or more from Office. That’s almost all software revenue. Where does that revenue go when customers move to the cloud?
Rizzo wouldn’t say how many customers are using Microsoft’s online business services–“millions and millions” was as specific as he got–but the last public number was about 2 million paid seats at more than 1,000 companies in April 2010. Google won’t say how many paying customers it has, but it does boast 30 million business users at 3 million companies.
That looks like good reason for Microsoft to worry.
Update: A Google spokesperson calls Microsoft’s claims about support false. Google provides on-demand phone support to large customers. The appropriate comparison here is Microsoft Office 365 For Small Business, which offers no email or phone support at all, and costs $72/user/year, vs. $50 for Google’s small business equivalent.
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