When Microsoft reported its third-quarter financial results last week, executives bragged about metrics for sales and adoption of Office 365. Indeed, they stated that Office 365 “net seat additions” grew five times compared with the same quarter last year. Moreover, 25 percent of the company’s enterprise customers now have Office 365. This folds up into a $1 billion annual revenue run rate.
The problem? Microsoft isn’t talking about how many Office 365 seats it sold. Furthermore, the 25 percent enterprise adoption stat includes scenarios where it may be used in a limited fashion.
We also need to consider that, in the past months, Microsoft offered various Office 365 incentives to channel partners. This includes special prices to enterprise customers and consumers. It will be interesting to see how 365 sells after these incentives end.
The trouble with most cloud computing sales reporting is that it’s difficult to break out where the real cloud computing growth occurs. Companies like Microsoft and SAP spin the numbers to make sure they reflect cloud computing growth. Perhaps you can’t blame them.
I suspect that Office will grow about on schedule. Those who have leveraged Microsoft office automation solutions in the past are pretty much on track to follow the upgrade paths. That is, unless something much better comes along. Thus far, the other Office competitors have not been able to knock Microsoft down, on-premise or in the cloud.