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People’s hatred of Skype is helping startups erode Microsoft Office’s dominance at work

Michael J. Coren

Microsoft is locked in a battle to own collaboration at work. It has a horde of products: Teams, OneDrive, Sharepoint, Skype, Office 365 Video, and more. Yet dozens of smaller startups are at the gates of the Windows fortress, and many seem to have breached its walls.

Slack, Box, Zoom, and others are carving off slices of the workplace for themselves, winning customers away from incumbents like Microsoft. Okta, an identity management company, released its annual workplace survey on Feb. 7 showing the most popular apps. Even though Microsoft offers free apps in its Microsoft 365 license, many companies are choosing to pay for startups competing services instead. Okta looked at the usage patterns of more than 5,500 apps that its 100 million registered users (5 million of which are active every day) used from November 2017 to October 2018.

It found the number of Office 365 customers who are choosing other, often duplicative apps from Microsoft is steadily growing. At least 75% of Office 365 customers were using at least one popular app not from Microsoft in their corporate cloud. The number using at least three rose from 21% in 2015 to 33% last year. At the same time, companies are embracing multiple different software solutions for their teams rather than standardize on a single suite of products. The average number of apps used per customer has risen to 83, up by 43% since 2015.

The days when chief information officers could dictate what software employees used are waning, Okta’s chief marketing officer Ryan Carlson told Quartz. New hires often ask about a companies “software stack” to gauge the quality of the workplace, and employees are demanding the tools they know from their smartphones.

Of course, Microsoft isn’t going anywhere. It’s still virtually indispensable for some companies. Its email program, Outlook, is one of those key offerings that IT departments love. Microsoft’s commercial cloud services are also on a tear, raking in $9 billion last quarter (growing 48% year-on-year), as are sales for its subscription services, like Office 365.

But the great unbundling has begun. Users are clamoring for what they love. Gmail was ranked the number one app among professionals Okta surveyed, while Microsoft’s Skype was their least favorite and most stressful app. If Microsoft can’t convince more people to use its collaborative tools, it may find itself increasingly pushed to the sidelines at work.

 

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