Microsoft’s increasingly strong Office 365 performance is coming partly at the expense of Google Apps. Motorola’s recent decision to move from an elderly version of Office to Google’s cloud service bucks the more common trend of companies who have been using Google Apps switching to Office 365.
It’s not just Microsoft saying that Office 365 is growing (COO Kevin Turner claims that four out of five Fortune 500 companies use the service). Last year, cloud security company Bitglass said traffic analysis gave Google twice the market share of Office 365 among its customers, with 16.3 percent of the market; that went up to 22.8 percent this year as more companies switched to cloud services. However, over the same year, Office 365 grew far faster, from 7.7 percent to 25.2 percent. Google has a slight advantage with small businesses (22.8 percent to Microsoft’s 21.4 percent) but in large, regulated businesses (over 1,000 employees), Microsoft’s 30 percent share is twice that of Google and growing fast.