June 22, 2012

2 Min Read
Office 365 and Cloud Suite Sales Forecast: Too Conservative?

By samdizzy

cloud sales forecast

Sales of Microsoft Office 365, Google Apps and other cloud-based productivity suites will triple from $1.6 billion in 2012 to $5.9 billion in 2016, predicts Radicati Group. But I’m wondering: Is the SaaS sales forecast too conservative, especially since most global 2000 companies and mid-market enterprises continue to run Exchange Server, SharePoint and other apps on-premises. Those on-premises customers provide big opportunities for cloud upgrades.

Radicati Group has a solid reputation for market research. Still, predicting the size of the SaaS market for email, collaboration and productivity services is tricky business.

Neither Microsoft nor Google disclose their revenue figures for Office 365 and Google Apps, respectively. But Microsoft Channel Chief Jon Roskill has hinted that he believes Microsoft already is the world’s largest provider of cloud software. And don’t forget: Dozens of companies offer hosted SharePoint, Exchange and other Microsoft apps.

Rackspace, for one, recently acquired SharePoint911 to accelerate its business in that Microsoft-centric market. And it’s safe to expect some Rackspace surprises at Microsoft Worldwide Partner Conference 2012 (WPC12, Toronto, July 8-12), Talkin’ Cloud believes. Also, Intermedia (a hosted Exchange provider) continues to generate record monthly deployments, I’ve heard.

At the same time, the Google Apps software partner ecosystem continues to expand — with the Cloud Alliance for Google Apps recently adding five new members, The VAR Guy reported. Many of those partners are set to attend next week’s Google I/O conference in San Francisco, where cloud apps will certainly be a topic of discussion.

In the meantime the bottom line is: I don’t have a good feel for just how big the cloud productivity suite market is. I have this strong feeling cloud-related SaaS revenues are going to accelerate far beyond expectations — though there’s always the risk of price wars that will eat into revenues…

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