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European cloud adoption grows thanks to Microsoft Office 365 push

Google broke the mould with a cloud-based office productivity suite, but it now appears to be losing ground to Microsoft

The adoption of Microsoft Office 365 in Europe has more than doubled in the past year, according to research.

Microsoft appears to be increasing its share of the cloud-based office suite market compared with the Google rival, G Suite.

The study by data protection company Bitglass was based on analysis of 8,000 mail servers to determine the cloud apps being used in businesses.

Bitglass reported that, in the UK, Office 365 grew from 16.4% in 2015 to 35% in 2016, while G Suite’s adoption increased from 7.2% in 2015 to 18.7% in 2016.

In France, adoption of Office 365 grew from 22.4% in 2015 to 49.8% in 2016, while German adoption grew from 16.2% to 40%. French adoption of G Suite grew from 14.5% in 2015 to 32.3%, while in Germany the adoption of G Suite grew from 6.3% to 23.3%.

From an industry sector perspective, Google has previously made major wins in media companies, boasting businesses such as News Corp as early adopters. Google remains strong in media (31.7%) and tech (24.9%), but Microsoft’s cloud-based Office Suite showed the larger share of adoption in all sectors.

The study reported that 49% of organisations with more than 1,000 employees have deployed Office 365, while only 20% have deployed Google’s G Suite.

Comparing public and private organisations, the study showed there was higher cloud usage in large public companies than in small to medium-sized enterprises (SMEs), as well as higher rates of adoption for Office 365 than for G Suite.

Year over year, Office 365 has grown 9% among public companies to 55.4%, while G Suite deployments have growing at a much slower rate in both public and private organisations.

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The imbalance between Office 365 and G Suite illustrates the challenge Google faces. First, many European organisations put a high priority on data privacy, which tends to favour the Microsoft offering. Second, Microsoft’s publicly stated strategy has been to move existing customers onto its cloud products.

A transcript of a question and answers session at the Barclays Global Technology Conference on 7 December 2016 was posted on the seeking Alpha financial blogging site.

In that session, Microsoft’s corporate vice-president for Office marketing, Kirk Koenigsbaue, said the growth of Office 365 has mainly been down to taking the company’s on-premise Office Suite customers to the cloud.

“We really have a very optimistic view about the future. We’ve been on this journey of moving our on-premise base essentially to the cloud,” he said.

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