Google attacks Microsoft by offering Google Apps for free to enterprise customers
Since the 1980s, Microsoft has dominated the productivity suite market. They increasingly extended their customer-base, and became a norm for offices and home users alike. With the trend towards cloud technology, new competitors like Google Apps emerged. Google Apps offers customers a freemium deal, where they receive the core product for free and can purchase additional cloud storage. Enterprise customers were offered a subscription-based payment plan, either monthly or annually, which gave them access to Googles services, but only until now. Google just announced that they will now offer Google Apps for Work for free for customers, until their contract with competing suites runs out. Google entered the market on the lower-end with their simple product offering, but increasingly extended their reach to enterprise customers. This new development can be considered an attack against Microsoft, an attempt to increasingly entice customers to switch from Microsoft to Google. Google now even offers firms to pay parts of their deployment costs, after their contract with competitors runs out. This strategy seems to be in line with the statement recently published by Amit Singh, head of Google for Work, where he says that Google wants users to use Microsoft and Google simultaneously, and that he believes in the long-run they will stop using Microsoft licenses. Eliminating the subscription model for enterprise users can be seen as an extension of this statement. Not only does Google want enterprise users to use the suites simultaneously, they also want them to do it for free, but only until their contracts with competitors run out. Then, Google will likely hope that customers switch completely to Google Apps. In any case, this new development will likely worry Microsoft, who are being attacked in their prime business area, the productivity suite market for enterprise customers. It will be interesting to see how Microsoft reacts to this. What do you think? What can Microsoft do to solidify their position within the market? What can they do to stop Google Apps from continuously stealing customers from them? They already introduced online functionalities to their traditional offline products to combat the trend towards the cloud, but can they change anything within their pricing structures?
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