There have been about a dozen times in my life when the lightbulb went on for me and I noticed something that I thought would be an absolute game changer. Some of these were in my teen years and my sounding board was my mother who often heard the cry “this is serious” while I was trying to convince her of some new revelation I had come across.
While my mother need take no more part in this, a game changing moment hit me last week and it was thanks to Microsoft and Office 365. Firstly, thankyou Microsoft for removing the BPOS moniker – your market share will go up just for changing the name!
As a technology integrator, our business revolves around selling products and services to customers. Proportionally we make more money from big projects where we deploy new technology as opposed to ongoing support. If we do a good job upfront then there isn’t much ongoing support revenue. That’s the idea anyway. Our cash flow, our vendor relationships, our remuneration packages for staff, our whole business revolved around buying something, adding value too it then selling it on. Microsoft Office 365 changes this and big time.
What my “game changer” was last week was simple – change your business model to start to support annuity business rather than big, lumpy project business. While this won’t happen overnight (we’re expecting a five year transition to where cloud is dominant), if you aren’t embracing this now, your future is bleak.
Office 365 contains the products and technology that nearly every business user uses every day – Office, Exchange, SharePoint & Lync. In the cloud, online 7/24, managed by a major player who guarantees uptime. Microsoft is the 800 pound gorilla in the desktop application space and now it’s available online! This is not good news for Google who has been trying to capture the enterprise with its own offerings of cloud-based office apps.
While Google’s apps have been out there longer, they don’t have any substantial revenue from them. User numbers is one thing, but profit is what keeps you doing it for the long term. Google has some soul searching to do now. In one fell swoop, Microsoft has kicked Google Apps, done, game over!
While Google may have been first to market, they still make most of their money from search/advertising. Microsoft, on the other hand, may be a little late, but its Office applications are known globally and account for much of Microsoft’s revenue. Office 365 is just another way of buying Office so users will understand this immediately.
Google needs to decide which fights they want to really fight. Most things outside of search for Google is “Beta” and to be honest, pretty half-baked. Google needs to lift their game if they want to be more than a search vendor living off advertising revenue and compete with Office 365.