The Other Platform: Office365, G-Suite and the new Era of Productivity Tech

Microsoft and Google are embarked in a fascinating quest to dominate the productivity application landscape. While the cloud race between AWS, Azure and Google Cloud regularly dominates the headlines an, certainly, takes a prominent spot in the earning reports, the battle between Office365 and G-Suite should be equally fascinating but it is often ignored.

In recent days, during the Inspire Conference, Microsoft announced new exciting additions to the Office365 platform. Connections is a new tool that enables the creation of email marketing campaigns a la MailChimp. Microsoft Invoicing is another new member of the Office365 family focused on enabling financing invoicing and payment processing capabilities. The third addition to the Office365 suite is Microsoft Listings which allows the management of ad-listings across platforms such as Facebook, Google, Bing or Yelp.

Google hasn’t been sitting still and they have been enhancing their G-Sutie platform to remain competitive or even edge Office365. Google Hire is a super-exciting addition to G-Suite dabbling into the complex world of HR and recruiting. Hire enables G-Suite to manage the recruiting pipeline and processes for open positions in a company. The new product complements the recently announced Google Jobs service.

The race between Office365 and G-Suite is having profound side effects across the technology market. Considering that the business productivity tools space has a market cap comparable to cloud computing and a multiple higher than most enterprise software markets, it is shocking that Wall Street analysts and investors pay so little attention to this segment of the market compared to others such as cloud computing. To put that statement in perspective, let’s examine of the impact of the Office365-G-Suite context.

1 — Amazon is Becoming More Aggressive in Terms of M&A

In addition to its main focus to power information workers, Office365 and G-Suite have served as great catalyzers for the adoption of Azure and Google Cloud respective edging AWS in many competitive scenarios. As a result, AWS has been working on its own line of business productivity services in areas such as email or messaging. Its is expected that Amazon will become very acquisitive in this market to bridge the gap with Microsoft and Google. Slack has been a well-reported target of Amazon’s M&A initiatives and others might soon follow.

2 — Great Climate for M&A

As a generalization of the previous point, we should expect tech giants such as Salesforce, Apple, WorkDay, Amazon and others to use their giant balance sheets to acquire startups that help them remain competitive with Office365 and G-Suite. If recent acquisitions are an indicator of the state of the productivity tools market, we are likely to see a new wave of consolidation in the space.

3 — A Bigger Impact on Wall Street’s Eyes

Windows and Azure dominate public investor sentiment when comes to Microsoft. Similarly, investors see Google through the lenses of ad revenues. Considering the size of the productivity tools market, we should expect Wall Street analysts to pay more attention to it in the near future and to have a more profound impact during earnings season.

4 — Salesforce is Coming is another company that I believe is in a unique position to compete with Office365 and G-Suite. The acquisition of Quip and Brett Taylor’s influential position in the company are strong indicators about Salesforce’s ambitions in the space.

5 — What About Apple?

Who knows? Until know, Apple’s efforts in the productivity tools and services space have been fruitless but Office365 and G-Suite represent a threat to Apple’s enterprise revenue. Apple can only rely on its big balance sheet to make a game changing acquisition in the space. Why not to buy Adobe which marketing cloud naturally complements many Apple’s offerings?

A polemical thought is always a good way to end a post ;)….

CEO of IntoTheBlock, Chief Scientist at Invector Labs, I write The Sequence Newsletter, Guest lecturer at Columbia University, Angel Investor, Author, Speaker.

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