bird soaring overhead
According to a Bitglass report, enterprise cloud deployments hit an all time high in 2016 PHOTO: Julia Revitt

The cloud is now the primary workspace in the enterprise, according to a report released last week by cloud access security broker Bitglass. 

The study looked at more than 120,000 unique domains and found that 59 percent of organizations worldwide deploy either Office 365 or G Suite (34.8 percent and 24.5 percent respectively).

It's a far cry from what things looked like in 2006 when a somewhat worried Box CEO Aaron Levie reacted to Google's rumored introduction of its own cloud file storage service called GDrive. Here is how Levie promised Box would work:

"In just a matter of days you will be able to login to your Netvibes account, upload files, then move over to your Goowy account and see those same files. Then, when you're away from your computer, just jump onto m.box.net and share a file directly from your Treo."

Microsoft on a Winning Streak?

Fast forward to today. The cloud is no longer just a place where you store and share files, it is where you do your work. And from the looks of the Bitglass results, more and more of that work is being done in Office 365.

It is worth noting that, if Campbell, Calif.-based Bitglass is correct, Google is losing ground to Microsoft. 

In 2014 Google Apps (now G Suite) was more widely deployed than Office 365. In 2015 Microsoft edged out Google with a 2 percent lead. And now the difference is more than 10 percent.

When it comes to large companies, which Bitglass defines as "more than 1000 employees," Office 365 is far more popular (48 percent vs. 25 percent).

The popularity may not necessarily mean Office 365 is a better product, but rather reflect the growing comfort level of businesses running Microsoft products on premises with the cloud. Because if you are moving off Exchange on premises, Office 365 probably feels like the obvious choice.

And when it comes to cloud content storage, Microsoft would like you to keep everything in One Drive for Business, but it is hedging its bets in a big way by allowing customers to use EFSS solutions like Dropbox, Box, Citrix ShareFile, Egnyte and others in conjunction with Office 365.

Google Wants in on Productivity Action

Google, for its part, would like you to keep your stuff on its cloud, but the company has come to realize that while Google Drive serves individual workers well, it wasn’t built for teams or to cater to the compliance and security needs of the enterprise. Google is working to remedy this with Team Drives for business file sharing, released this week in beta. 

It's also interesting to note that if you break out Office 365 versus G Suite users according to whether their companies are publicly or privately held, public companies favor Office 365 two to one versus private companies at 29 percent to 25 percent. The report doesn’t ask whether cost or bureaucratic thinking are influencing factors.

Stealth Cloud Maneuvers

The numbers above don't reflect the use of unsanctioned cloud software in the workplace.

Bitglass found that an estimated 33 percent of enterprises have at least tried communications app Slack, but cautioned that many Slack instances may not have IT's seal of approval. 

This doesn't seem to worry Ilya Fushman very much. In a Medium post published last week, Fushman, a partner at Slack-backer Index Ventures, explained that a freemium model is great for bringing high-quality products to market.

“Instead of your sales pitch being 'Would you like to learn about this new product category?' the pitch becomes 'Twenty percent of your employees use and love our products; here is the enterprise hardened version that satisfies your business requirements — no training required and adoption guaranteed.'"

And once you "buy" Slack, you might be forced to stick with it, it seems. 

Fushman went on to champion the idea that once one team uses and falls in love with Slack, it will convince new users from inside and outside of enterprise to adopt it for collaborative purposes. Once they do, a lock-in of sorts occurs, or in Fushman's words, "If you're using a single product to collaborate with more than one partner and want to switch, you'll have to convince all of them (which is extremely difficult)."

What Comes Next?

More cloud, says the Bitglass report. "The benefits of migrating to cloud apps like Office 365 and G Suite now far outweigh the few drawbacks — transition costs, data security, and concerns around ceding control over infrastructure — and it shows high growth rates of adoption."

And while it's unsurprising to hear a company whose fortunes rest on cloud computing make this prognosis, it's safe to say that cloud computing isn't going anywhere.

The questions for 2017 are whether cloud adoption will continue at this rate and who will win in the long run.