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article imageDoes Microsoft's massive Office 365 spell the end for startups?

By James Walker     Aug 16, 2017 in Technology
Microsoft's efforts to make Office 365 the only cloud solution businesses could mean it's "curtains" for rival startups. The CEO and co-founder of data transfer company Egress said startups are being threatened by Microsoft's rapid cloud expansion.
Microsoft has been aggressively building out its range of Office 365 products, adding new software tools and cloud services to assert its dominance in enterprise cloud computing. It recently announced a new subscription, Microsoft 365, that bundles Windows 10 and Office 365 into a single ongoing purchase. It's also rolled out a suite of tools aimed at small business owners.
Microsoft's attempts to make Office 365 contain everything a business could want haven't gone unnoticed. This week, Egress CEO Tony Pepper expressed concerns likely to be shared amongst startup owners. As Neowin reports, Pepper told Computing that Microsoft's work to "plug the gaps" in its cloud are removing the footholds that startups used to compete on.
As Microsoft's dominance spreads into more areas of productivity software, established apps and services might be forced to take a defensive stance. In the past few years, Office 365 has grown far beyond its initial focus on Microsoft's long-established Office desktop apps. Alongside the staples of Word, PowerPoint and Excel, buying Office 365 now gets businesses a real-time messaging service, data analytics tools, project management capabilities, cloud storage and much more besides.
Office 365 Business Center
Office 365 Business Center
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Pepper said Office 365 "has completely changed everyone's world." Instead of sourcing, connecting and paying for a myriad of disparate products, companies can now buy an all-encompassing subscription that gives them every piece of productivity software they need. Startups that come up with a new idea could be rapidly forced out of business if Microsoft chooses to copy it and add it to its subscription offerings.
Pepper said the days of treating Microsoft as a disorganised and monolithic company are now long gone. It's still a monolith, as the vast array of apps included with Office 365 demonstrates. There's now structure and an overarching vision though, turning the Office 365 concept from an unrealisable idea to a powerful business weapon. Pepper said the platform is "the biggest threat" to many other tech companies.
Microsoft Stream
Microsoft Stream
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"[Microsoft] is doing lots of things, and traditionally you'd follow that up with: yes, but they're doing them badly," Pepper said. "That's not the case any more. They're doing lots of things and they're doing them really well. … There's a threat there. If you look at the applications they host within that, Office 365 has completely changed everyone's world."
Microsoft now faces the unusual challenge of approaching the point where Office 365 is too big. With the platform growing into a behemoth of productivity software, it risks forcing out of market the very customers who are relying on it. The service is now one of Microsoft's biggest earners and its growth shows no signs of slowing down yet.
Revenue growth for Office 365 commercial plans is up 47 percent and companies ranging from local small businesses to sprawling multinationals are signing up. Office 365 appears to be becoming the Facebook of productivity platforms. Rivals can try to compete, but they can't offer the same dazzling array of features or unassailable scale.
More about Microsoft, Office 365, Office, digital transformation, Cloud computing
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