Google Apps is losing share to Office 365, says Deutsche Bank

Kellogg Brengel

It’s no longer news that Microsoft’s Office 365 has surged ahead of Google Apps for Work in terms of market share. Reports first started demonstrating Office 365’s jump to leading in market share a little over a year ago.

Now it looks like Office 365 just hasn’t jumped to the number one spot, but it is also eroding what market share Google Apps for Work has left. The observation comes from Karl Keirstead, Software Equity Research Analyst at Deutsche Bank. Keirstead noted many of Microsoft’s partners at WPC said “Google Apps market share is eroding thanks to Office 365.”

office 365
Office 365

The story was picked up by TechRadar, who notes that these conclusions are drawn without referencing any hard numbers. This is really just an assertion based the conversations and sentiment at WPC last week.

But if Kierstead’s conclusions that Office 365’s adoption is “already ramped up” are true, it is certainly troubling for Google. While the market share reports started to indicate Office 365’s dominance starting last year, Google hasn’t given up the fight. Notably, the Mountain View company is offering Google Apps for Work for free to Microsoft’s Enterprise Agreement customers. The bid to lure customers away from Redmond also includes bounties for Google’s partners whenever they sign up a Google Apps for Work user.

google apps for work
Google Apps for Work

The campaign of giving away Google Apps for Work for free and essentially paying out extra commissions for each successfully added user is undoubtedly costly. And it would be bad news for Google if the only outcome of this campaign was continually eroding market share.

Microsoft has a lot to celebrate for its now five-year-old cloud-based productivity software suite. But while it’s growing market share is a strong success story, there are still some kinks to be worked out. Recent reports still suggest that Office 365 adoption is still struggling among small to midsized business. And much still remains to be seen about the future landscape of cloud-based software platforms. Nevertheless, Microsoft’s embrace of a cloud-based approach to Office certainly seems to be finding its own success.