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Inside Microsoft Office’s Plans to Compete with Google Apps

Microsoft is waging a charm offensive to convince developers to integrate their products with Office 365, its cloud-based productivity apps, a sign that it is stepping up competition with Google Apps.

A compelling signal of how much is at stake: Microsoft has been striking alliances with companies it considers competitors. Since October, it’s announced a series of partnerships to allow Office 365 users to access features from sales software firm Salesforce.com (which competes with Microsoft Dynamics) and storage firm Dropbox (which competes with Microsoft’s OneDrive). The Salesforce effort, for instance, will allow customers to import contacts directly from Microsoft Outlook and crunch data from the Salesforce system within Excel.

The efforts reflect a new turn in the productivity software market. Microsoft dominated productivity tools in the desktop era and still is the undisputed leader in non-cloud applications, bringing in $25 billion in revenue last year selling Office to businesses. But there are some signs that Google is eating into its market share when it comes to the looming migration of big businesses from desktop software to cloud-based apps.

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The competition should benefit enterprise app developers, because it gets their products in front of many more potential customers. Microsoft has been extremely aggressive about selling Office 365. And by pairing with tens of thousands of small tech-support shops around the world that are partners or resellers, Microsoft has an infrastructure for selling into businesses large and small that Google does not.

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Joe Lonsdale
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Tellingly, Microsoft has pursued companies that were traditionally centered on Google Apps.