It has been more than a week since Microsoft (
) launched the Office 365 web based productivity software suite on
June 28. The overall reaction to the Office 365 launch has been
positive so far. In the week since its launch, Microsoft's stock is
up nearly 5%. Microsoft's stock price is now very close to the
$27 Trefis price estimate for Microsoft stock
. Microsoft Office is the most valuable business for Microsoft and
accounts for more than 30% of the Trefis price estimate for its
stock. With Office 365, Microsoft aims to compete with rivals like
) and Salesforce.com (
), which also offer similar cloud based productivity software.
Microsoft Aims to Penetrate the Cloud Computing
The launch of Office 365 is a major step by Microsoft which
would help it retain its overall market share in the productivity
software market. Microsoft has a 94% share of the desktop
productivity software market, but it has been losing ground to
rivals like Google and Salesforce in the cloud computing space.
With the launch of Office 365, it has a very good chance of
becoming the dominant player even in the cloud based productivity
software market based on initial reviews.
Many SMBs and large organizations are moving towards
subscription based cloud offerings to lower their maintenance and
deployment costs. Office 365 would provide Microsoft with yet
another source of recurring revenue with a profit margin close to
Microsoft's primary cash cow - the Microsoft Office suite.
The cloud computing software and services market is expected to
grow by 27% annually and reach $73 billion by 2015. With Office
365, Microsoft aims to become the major player in this very
Check out our complete analysis for Microsoft