Google Inc (GOOG): Is Microsoft Corporation (MSFT)’s Cash Cow In Trouble?

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Google Inc (NASDAQ:GOOG) has been pushing into the enterprise market, though, and the company does have a few big wins. But Microsoft is heavily entrenched, with long-term customers unlikely to jump ship. Google may slowly win some market share from Microsoft, but in the end Microsoft will likely still be dominant.

Google isn’t alone in pushing office apps to the cloud. Microsoft released Office 365 along with the newest version of Office, a subscription-based version of the productivity suite. Instead of paying a large upfront fee, Office 365 is offered for a low cost per user per month, much like Google Docs in the enterprise. Office 365 doesn’t run in the browser, however, which makes it faster and more responsive than Google Docs. Documents can be saved to SkyDrive, Microsoft’s cloud storage alternative, and edited on mobile devices with ease.

Office 365 had a $1.5 billion annual run rate at the end of fiscal 2013, impressive growth from a $1 billion annual run rate just a few months earlier. The subscription model allows Microsoft to avoid the trouble of having to resell Office to customers every few years and instead collect a steady stream of recurring revenue.

Google Docs is more basic than Office, making complex documents difficult to deal with. While Office certainly has a learning curve its power and feature-set are unmatched.

The bottom line

After using both Office 365 and Google Docs one thing is clear-documents of any complexity are far simpler to create and deal with in Microsoft Office. Google’s offerings are fine for basic usage, but I don’t see enterprise users swarming to use them unless their needs are basic as well. With Windows on almost all enterprise PCs mixing and matching Microsoft and Google services doesn’t make much sense, and this introduces a real aversion to moving from Office to Google Docs. Microsoft Office is the most capable productivity suite around, and at least in the enterprise it is here to stay

The article Is Microsoft’s Cash Cow In Trouble? originally appeared on is written by Timothy Green.

Timothy Green owns shares of Microsoft. The Motley Fool recommends Google. The Motley Fool owns shares of Google and Microsoft.

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