Google, Microsoft Battle for Business Cloud Customers

For more than a year, Microsoft has been pushing an aggressive “all in” cloud strategy. The reason behind it is simple: Although desktop-bound software such as Windows and Office continues to dump tons of cash at the company’s front door, a paradigm shift is underway—one that threatens to leave Microsoft behind as consumers and businesses embrace the cloud for everything from music streaming to email and productivity applications.

Businesses embracing the cloud expect the new subscription-based model to save them the money and headaches associated with maintaining (and upgrading) on-premises servers and IT infrastructure. That subscription model also ensures Microsoft a steady stream of revenue month over month. For example, Office 365—a rebranding of the company’s BPOS platform, now in public beta—unifies Microsoft Office, SharePoint Online, Exchange Online and Lync Online onto a cloud platform available for a set monthly fee per user.

But there’s also one very large obstacle standing in the way of Microsoft’s path to the cloud: Google, which has devoted enormous resources to developing and deploying its own cloud-based offerings for small and midsize businesses, and the enterprise.

Over the past few months, the animosity between the two companies has escalated to ever-greater heights (or sunk to a deeper nadir, depending on your point of view). Last October, Microsoft announced a partnership with New York City’s government to provide municipal employees with access to cloud-based Microsoft applications, in what many saw as a response to Google’s agreement with the city of Los Angeles to provide cloud services to its employees. On May 18, Microsoft announced that the city and county of San Francisco had signed a contract to port 23,000 municipal employees’ email to its cloud.

The competition between the two companies has become so intense that Google even sued the federal government after the Department of the Interior allegedly denied its bid to update an email and messaging system—a $59 million, five-year contract that had gone to Microsoft’s BPOS-Federal suite.

Tom Rizzo, senior director of Microsoft Online Services, insisted in a May 17 interview with eWEEK that businesses were trying Google’s business-cloud offerings and then shifting back into Microsoft’s camp. The interoperability of his company’s cloud offerings with its traditional software, he insisted, had helped Microsoft maintain momentum as it shifted into the cloud. While he didn’t cite any data for the number of companies supposedly shifting to Microsoft from Google, he did call out supposed “wins” in that category such as the city of Winston-Salem, which did not return eWEEK’s independent request for comment.

Google executives speaking on background to eWEEK took strident exception to Microsoft’s assertions.

For more, read the eWEEK article: Microsoft, Google Business-Cloud Battle Getting Vicious.