Office 365 Dominance Grows with New Markets

Microsoft is releasing Office 365 into another nine countries, bringing its total market penetration to 140 of 196 countries worldwide.

The fact that you can now get Office 365 just about anywhere there is a business culture is not surprising. But the pace at which it has developed is startling.

When it launched just over two years ago, it was available in around 40 markets. A year later it was in 88 markets. By the end of 2013, it was up to 127 markets and now ... well, just about everywhere.

Global Appetite

For the record, the new markets that have come on stream this week include: Afghanistan, Botswana, Ethiopia, Namibia, Nepal, Tajikistan, Tanzania, Uganda and Zambia. In addition, Office 365 is available for non-profits (direct only) in Cyprus, Estonia and Paraguay

Ok, so unless you live in those countries, this news won’t really set your world on fire. But it is worth noting that six of the countries are in Africa, which has a rapidly growing appetite for IT, especially IT that can be consumed on mobile devices.

It is difficult even at this stage to assess how deep Microsoft has penetrated into these markets. The company is historically reluctant to publicize its figures around its different products, but it does give tantalizing markets in its quarterly figures.

Last month it produced first quarter results for 2015. While they were generally good all round, it seems that its client base just couldn’t get enough of its cloud products over the quarter.

According to a statement that accompanied the figures, Office 365 Home and Personal subscribers totaled more than 7 million at the end of the quarter, which is 25 percent sequential growth over the previous quarter.

It also reported that Office Commercial products and services revenue grew 5 percent as customers moved to Office 365, while commercial cloud revenue grew 128 percent, driven by Office 365, Azure and Dynamics CRM. Breaking that down further, the statement also shows that Lync, SharePoint and Exchange collectively grew by double-digits.

Microsoft’s Office 365 Strategy

In the blog post outlining the new market gains, the Office 365 team said these figures were inevitable and were part of the plan when Microsoft's Business Productivity Online Standard Suite (BPOS) was still around and Office 365 was only a twinkle in Steve Ballmer’s eye:

1n 2010, the idea was simple — bring together the Microsoft productivity suite, including Office, SharePoint Online, Exchange Online and Lync Online, in an always-up-to-date cloud service and charge a predictable monthly subscription. From that simple idea Office 365 was born," the post reads.

You can interpret this any way you want, but the success and, more importantly the development of Office 365 seems to be as much the result of chance as it was the result of a universal master plan.

While Office had always been a stable of the Microsoft portfolio, the development and acquisition of other products that ended up in Office 365, like Yammer, appears pretty random, with some of those products — Yammer again — only really finding their place in the suite in recent times.

But at this point, Microsoft can say what it likes about it really, as its success is undisputed and to the victor goes the spoils.

In this respect, Google’s rebranding of Enterprise as Google for Work almost seems a tacit acknowledgement of Office 365’s enterprise market dominance, particularly as Microsoft continues to develop not only the product but the business too.

Indeed, at the end of last year, Forrester research showed that, 20 percent of enterprises are using email in the cloud, with a further 25 percent expected to move over the next year. Only 1 percent use IBM SmartCloud for Social Business, and more are using Office 365 (14 percent) than Google Apps (9 percent).

It also pointed out that most companies plan to move to Office 2013, with 16 percent planning to have it completed by the end of this year, and a further 20 percent next year.

Even keeping in mind that these figures are now nearly a year old, it is still clear that the deployment of Office 365 continues apace in the enterprise.

While there are other productivity suites available out there that have all managed to build up respectable markets — IBM, Soho and even LibreOffice, the free and open source office suite — it seems that at least for the moment, Office 365 is unassailable.