Consumers are the gateway to enterprise adoption of productivity and communications tech: Microsoft vs. Google

August 3 2021

Enterprise executives know that employees are performing at their best when they have the productivity and communications right tools and, more importantly, know how to use those tools.  

When employees come on board having already used the software your company uses, it reduces your organization's downtime, costs, and effort tied to training. You can realize many of the same benefits of efficiency and user adoption when implementing a new solution that your employees already understand. Employees are first and foremost consumers, and vendors are very much aware of this. Vendors know that they have a more compelling story to tell if they can show strong consumer use and adoption.

That growing overlap between business and consumer technology has emerged as one of the big trends in the competition unfolding today in enterprise productivity and communications solution space. The biggest players, like Microsoft and Google, are fighting to retain and expand their user bases. At the same time, emerging competitors have chosen a variety of strategies to attack the enterprise market, often with consumer appeal as a key element.

Consumers Are Using Productivity and Video Conferencing Solutions More Than Ever

The coronavirus pandemic forced people to abruptly find ways to work, attend school, and socialize with family and friends from a distance. The shift caused a surge in the use of cloud-based productivity tools (such as Office 365 and Google Workspace) and video chat/conferencing solutions (such as Teams, Zoom, Google Meet, and Slack (now part of Salesforce).  While many people used these tools prior to the outbreak, they are now using them more than ever before.  Those who have never used these products had to learn how to, such as those parents who needed to set up their children for digital learning.

Whether forced or not, the consumer appetite for these products has also significantly grown, and vendors hopped on this opportunity to increase consumer use through free trials and other offers. Consumer adoption of these tools helped drive enterprise adoption, especially for Google Cloud as it had been ramping up efforts to penetrate the enterprise and take market share from incumbent Microsoft.  Google had been successful pre-pandemic, but there was certainly more work to be done as the company transitioned from being enterprise-ready to a true, trusted enterprise vendor. 

Similarly, both Zoom and Slack understood that if they wanted to increase revenue, they needed to find ways to penetrate more enterprises and further increase usage within the enterprises they are already in.  Even though the pandemic provided an opportunity for increased use including in enterprises, the struggle they still have is two-fold.  First, they don’t offer a complete, robust set of solutions the enterprise could tie itself to and second, the more established Microsoft and Google have product suites and more offerings including ones that are competitive solutions to Zoom and Slack built in.  

Microsoft’s Office 365 includes Teams and Google Workspace comes with Google Meet.  It is a hard sell to convince these enterprises to add a solution that they already have.  That barrier is why it is incredibly important for Zoom and Slack to dominate the consumer space; it makes the sell a bit easier.  Slack seemingly decided that the fastest (and likely the best) way to gain access to enterprises to drive adoption was to let Salesforce acquire them, which Salesforce did for roughly $28B.  Whether this will work for Slack and Salesforce is a topic for another day.

Google is Gaining Traction

Beyond the consumer use of its Workspace solutions, Google has accelerated enterprise adoption in the past couple of years.  Javier Soltero, VP and General Manager of Workspace at Google (who was previously at Microsoft as VP of the Office Product Group), shared last year that Google Cloud had officially passed six million paying Workspace business customers.  This is an increase of one million users from the previous year.  

About Adam Mansfield

As Commercial Advisory Practice Leader at UpperEdge, Adam Mansfield is responsible for leading and managing client engagements across Microsoft, Salesforce & ServiceNow services. Beyond ensuring the quality and delivery of UpperEdge’s services, Adam provides strategic advice, actionable insight, and precise market intelligence to line of business, information technology, and strategic sourcing executives responsible for key IT relationships.

Adam has over 15 years of experience negotiating cloud computing, software, system implementation, hosting, AMS, outsourcing, and data center agreements, ensuring significant savings and optimal deal constructs are achieved. Adam is considered a thought leader in cloud subscription agreement negotiations.

Prior to joining UpperEdge, Adam served as a Director in AMR Research’s Contract Negotiation and Benchmarking Service (CNBS) and he was a contract negotiator at SkillSoft Corporation.

Adam holds a degree in political science with a minor in business administration from the University of New Hampshire and received his JD/MBA from Suffolk University.

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