Quartz posted an interesting article about Google stealing away Microsoft’s future customer base. The argument goes that Google’s less expensive options for email has built a small business customer base that is cost conscious above all and, as these businesses grow, they just build on Google Apps. The end result is a base of businesses that will grow larger and therefore, grow on Google Apps because they have become entrenched.

Well, maybe. Having seen and used both Google Apps for Business and Microsoft’s Office 365 E3, the reasons to buy Office 365 become apparent once you grow into a full fledged Enterprise. Consistently, the issue will come back to scale. Let’s go point by point with the article.

Point 1: Google has the traction with mid-size and small businesses
According to the stats outlined in the article, it is all true! Exchange has long had the email stronghold on everyone with good reason. Microsoft even added it directly into its Small Business Server for a while in order to help small businesses. In today’s market though, Exchange can no longer compete with a cloud based email solution at a small scale. You can save on IT staff and support costs by moving to the cloud. Can the argument for Office 365 be made? Absolutely! Microsoft does need to make some improvements here though.

1. Make the Office 365 licensing website as easy to read as the Google Apps for Business pricing page.
2. The breadth of licensing options on Office 365 makes it confusing vs. Google’s one size fits all. Plus, Office 365’s competing $5/month/user product is limited to 25 users. Rework this to allow more users and call out this feature for those looking for a Google comparable product. If folks don’t want Office, it’s not because they are limited to 25 users.
3. Develop better registration tools and add a purchase option to the mobile Office 365 app to make it easier for small businesses to register. Offer a self-registration option for other users with that same domain name, so user management becomes simple.
4. Expand the Connected Accounts feature into a migration solution for small businesses to use.

Point 2: Microsoft has a tight grip on larger enterprises
Large Enterprises need to remain agile and flexible. Often, they have a harder time doing so because of their size. Their scale requires each IT investment to yield larger savings over a more diverse base, which is a clear challenge.

This is where Microsoft’s ubiquitous solution shines. In these large Enterprises, we have an employee base with vastly different requirements that can do everything they want on one Office platform. Not only that, they know that other companies are doing the same. Interoperability is key to maintaining these corporate relationships.

Point 3: Google may have other competition though
This is where things really break down. Box and DropBox could be competition to Google Drive or their new Drive for Work. In reality though, these solutions fill a need that Google isn’t meeting and some businesses will find that they will purchase both Google Apps and Box, for example. Google Apps does certain things (email, chat, basic document management, collaboration and editing) and Box does other things well (like integrated collaboration with Microsoft’s Office suite). The issue isn’t so much one of competition, but one of features.

As your small business grows and more features are required, Google may be supplemented by other solutions. This means more money will be spent on other solutions through licensing and support.

Point 4: Google is cheap
This is possibly the most important point to your small business, but let’s stay with this article and build on the above conclusion from Point 3. As a company grows, what else might be needed?

Let’s assume that your business might need a conference call and meeting solution. With Google, you don’t really get anything for that. With Microsoft, you get Lync (which does a TON of stuff besides chat and presence by the way). But still, let’s focus on Google. You could go with Intercall for audio dialing or WebEx for meetings. Let’s stack those on top of our Google costs. Don’t forget that WebEx doesn’t have a Google Apps plug-in equivalent like it does (for free) with Outlook. If you need that feature, check out Esna and pay even more.

Another reason Google is cheap is their feature release cycle, or lack thereof. There are not a lot of improvements made to the service. Postini is still around, even though their support really isn’t. Google Apps Sync for Outlook is a hobbled mess, and if you check the forums, there are plenty of legacy calendaring issues that have yet to be fixed. This solution is not Enterprise ready. It is only good enough until you grow and need something more robust.

Real Costs on an Enterprise Scale
Points 3 and 4 have shown that you may have to supplement Google Apps with non-Google solutions as you grow and find new requirements. Something to consider is the multitude of vendors you may now have, including Microsoft, that you are now paying for licenses and support. Vendor consolidation might be something you’ll consider as you look at your growing IT budget.

Microsoft has consistently won the Office and email battle over the years, crushing other solutions into oblivion. Now that it has combined these offerings and supplemented them with other collaboration solutions and mobile apps, I just don’t see the momentum swinging to Google. With Satya Nadella at the helm, Office for iPad and Android, and frequent updates to improve Office 365, this battle is already shaping up to be in Microsoft’s favor. As a small business grows into an Enterprise, IT and complexities will grow. Cost analysis will prove out that Microsoft is the way to go.