Who is Microsoft trying to convince?

This week, Microsoft released a new whitepaper (available here) that decries (kvetches?) that the real cost of Google Apps is much more than the $50 per user per year that everyone assumes. It lists various areas where Google Apps is either weaker, or where there are significant costs, specifically around ongoing support and one-time migration costs.

In the words of my kids, “Well, Duh!” Microsoft is not trying to convince the individual casual (or even serious) users, to whom such issues as Exchange migration costs are irrelevant. They are clearly going after the corporate or enterprise market. This is the same market that has IT folks who are quite experienced in comparing software alternatives, thank you, and no doubt have built into their cost comparison the fully loaded costs of using Google Apps versus internal productivity software from Microsoft.

Further, the same could be said of internal Microsoft software: the cost of MS Office Pro is far in excess of the $500/user retail price (even after the likely negotiated 50-75% enterprise discount), for all the same reasons Microsoft lists: conversion costs, maintenance costs, support costs. If anything, these costs are likely far higher per user for the installed Microsoft software than they are for the software-as-a-service Google Apps offering. In many cases, the sheer support and deployment costs are the number one reason why corporate and enterprise IT are switching. My colleague Jason Hochman pointed out, just getting out of supporting Blackberry Enterprise Server alone makes it worth it. That is an interesting hypothesis; if it is true, then people are killing Microsoft Exchange, just to get away from another company’s bolt-on product. Little RIM shooting Microsoft is ironic.

So… if all the potential switchers targeted by the whitepaper know these facts, and it is even dangerous for them to point out the ancillary costs when they are even worse on Microsoft deployed software than on Google Apps SaaS, why is Microsoft releasing the paper, and who, exactly, are they trying to convince?

I don’t have an answer, although I suspect speaking to the analysts – both industry like Gartner and Forrester and financial from Goldman and Morgan – plays a part as does internal politics. Or, possibly, it is just speaking out of frustration. Carol Bartz is doing a lot of that at Yahoo as the once-storied company goes down the tubes, and Tim Armstrong is doing the same at AOL (anyone starting a betting pool on who goes down faster?), and in the end these companies are run by very real (and emotional) human beings.

About Avi Deitcher

Avi Deitcher is a technology business consultant who lives to dramatically improve fast-moving and fast-growing companies. He writes regularly on this blog, and can be reached via Facebook, Twitter and avi@atomicinc.com.
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