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Microsoft touts 400% Asia growth for Office 365

SMBs make the leap online but Google benefiting too

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Microsoft is trumpeting impressive 400 per cent growth in adoption of its Office 365 online productivity suite by Asian SMBs over the past three quarters, although analysts pointed out that Google is still taking business from Redmond worldwide.

Office 365, Microsoft’s “Office in the cloud” play, was launched initially in Singapore, Malaysia, Australia and New Zealand on 29 June 2011, with other Asian countries following later.

Microsoft could not disclose actual numbers of customers won in the region over the past three quarters but said that some had experienced increased productivity of up to 80 per cent while shaving costs by a tenth.

“Prior to Office 365, SMBs were massively underserved, relying on a ‘hodge-podge’ of older solutions that didn’t work together. With Office 365, they can experience the latest in productivity from a familiar and trusted source,” said Microsoft’s CMO for Asia Pacific, Andrew Pickup, in a canned quote.

Redmond has also taken the opportunity to rub Google’s face in it, rolling out an SMB customer quote which points to users being reluctant to switch from their familiar Microsoft environments.

However, analysts have a slightly different take on things. A Gartner report issued last week - Google Upsetting Microsoft's Cloud-Office System Ambitions – points out that “Google Apps is taking more business away from Microsoft than we expected, raising its stature as an enterprise provider”.

It argued that Google’s “call-to-action” is attracting some customers unhappy with their current set-up.

The report also had the following:

Compared with Microsoft, Google appears to be winning one-third to one-half of new, paid-for, cloud-based office system seats.

Microsoft is dominant on-premises, but its marketing-driven strategy — basing new offers on cloud-based instances of its enterprise on-premises systems — may have lulled too many existing Microsoft customers into doing nothing with Office 365.

Gartner software markets analyst, Hai Hong Swinehart, told The Register that Microsoft’s total revenue for its on-premise and online office products in Asia stood at around $2.5bn last year, with online accounting for around 1.5 per cent.

She predicted that the online segment would grow around 200 per cent in Asia this year, although was keen to point out that absolute revenue for Microsoft would still be quite small.

The industry is nevertheless shaping up for sizeable growth in the coming years, she added.

“Based on Gartner’s 2011 SaaS Application Survey, in Asia Pacific 40 per cent are currently using web based office suites, 34 per cent are planning to use in the next two years and 27 per cent are not planning to use,” Swinehart explained.

“In terms of usage of web-based office suite software by company size, current adoption is 39 per cent in smaller companies with fewer than 100 employees, while upper-midsize to large companies have adoption of about 23 per cent.” ®

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