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Google's Offer to Microsoft Office Users Is Working

3 minute read
Erika Morphy avatar
Google's offer to pay licensing costs for Microsoft users has given companies new leverage -- with their incumbent vendors.

Ten days ago Google posted an intriguing offer for Microsoft Office ... no, make that all productivity software users with enterprise agreements: Switch to Google for Work and Google will waive the Google Apps licensing fees until the contract runs out

Google also promised to cover some of the deployment costs and connect the company to a Google for Work partner. Total value of the offer? According to Google's math [PDF], it could save the company some 70 percent.

CMSWire's take on the deal was that it only makes sense in one very specific scenario. That would be an organization that, despite the investment it has made with an enterprise agreement with Microsoft, has decided that Google For Work is what it really, really wants. "That company could get a less expensive migration as the result of this offer," Rob Helm, managing vice president of Directions on Microsoft told CMSWire.

Bargain Hunters

Turns out we were right, albeit with a caveat. The offer also works for a company that has an enterprise agreement coming to an end and it is time to renegotiate. That company in question doesn't necessarily have to really, really want Google For Work. It can just really, really want to secure a better deal -- be it with the incumbent vendor or Google.

Of course, all companies really, really want the best deal at any given point.It is rare, though, to have a publicly-splashy competing offer like Google's descend Deus ex machina style as they go to negotiate.

Silicon Valley-based Constellation Research analyst Alan Lepofsky saw this dynamic in action in recent days when a global non-profit approached its incumbent vendor to renegotiate its enterprise agreement.

The non-profit had been in the vendor selection process anyway, but Google's offer was right in its sweet spot and the incumbent vendor realized that, Lepofsky told CMSWire. The end result? A quick capitulation on the part of the vendor and a better deal for the client.

It is not clear yet how many new users Google will bring on board with its offer. But just having it out there is giving companies new leverage with their vendors, who are also Google's competitors.

Learning Opportunities

What to Consider

For companies that do decide to cast their lot with Google, they had better be doing so for more reasons than just this offer, Lepofsky warned.

To state the obvious – although it may not appear obvious to some companies — you will have to sign a new enterprise agreement with Google at standard terms and conditions for one year once the old agreement runs out, he said — and if the company has decided it doesn't like Google For Work after all during the trial period, then too bad. 

In a blog post called "Mind the Fine Print" Lepofsky dissected what this means. If a current IBM or Microsoft customer evaluating a move to Google decides at the last minute it wants to renew with its existing vendor "it will be stuck double paying for 12 months to Google," he writes.

In addition, the credit offer is good for only up to 3,000 user licenses per customer, he wrote. 

"One might quibble with the idea of that user count equating an enterprise-sized deployment." But the offer also notes that"standard monthly fees will be applicable for any additional user licenses during the Remainder EA Term which will be prorated to the end of such term, and for the one year period following the Remainder EA Term."

Title image by Sonja Guina