The largest university in Japan, Nihon University will provide “Office 365 Education” for all of its 100,000 students according to the Microsoft Japan website.
I’m still in the process of researching the details, but some things that have been mentioned that I find very interesting;
- Nihon University had been using “Google Apps Education Edition” since April, 2007.
- Reason 1: Faculty staff used Google Apps but student uptake was not good. Students preferred to use their own free mail accounts.
- Reason 2: Unfamiliarity with Google Apps was a reason for slow uptake. By providing the software that everybody is familiar with (Office), Nihon Univ. hopes that students will also use scheduling and address book features.
- Reason 3: Students were pirating MS-Office install disks. Office 365 will make that a non-issue. Nihon Univ. chose the A3 plan with Office 365 ProPlus, which means that faculty and students can install Office on 5 PCs per user.
- Annual price per faculty is 410 JPY, per student 230 JPY. This ends up being cheaper then when they were using “Google Apps Education Edition” because even when they were using Google, they still needed to buy significant installations of MS Office.
Although we still need more examples to see whether this is a trend or not, I sense strong beginnings.
Cloud is getting cheap
The most powerful allure of Google Apps is the price. For general consumers and for education, the price is free. This was possible because Google had a robust advertising model. By injecting ads in the web user interfaces, Google could justify the cost of providing the service for free.
Historically, Google was uniquely positioned to provide an office suite for free. Other companies could not do this profitably.
However, as technology improved and the hardware required for cloud services dropped in price, it became feasible for companies without a robust advertising model to provide free or very cheap cloud services. This can be witnessed in the recent announcement at Apple’s WWDC 2014. Apple announced that they would be providing CloudKit effectively for free.
We are now at the point that we don’t even need advertising anymore. It has become feasible to provide free or very cheap cloud office suites, even without advertising. Hence anybody can do it. Google no longer has a unique advantage in providing services for free.
Google Apps never became “good enough”
With the cost advantage of Google Apps eroding, the argument for choosing either Google Apps or Office 365 now rests on the benefits that each platform provides. This is something that Google Apps was never designed for.
Since its inception, Google Apps was designed as a simplified version of MS Office that justified its existence by being much cheaper. Although it had some unique collaboration features, it never evolved to become better than MS Office. It was always obvious that if it lost its cost advantage, it would lose out against MS Office.
Looking at the reasons why Office 365 was chosen over Google Apps, it’s very apparent that Office was still an application that both faculty and students needed to use from time to time. Google Apps had never become “good enough” on its own.
Microsoft is changing
Since the costs of providing cloud services had decreased, the only roadblock for Microsoft going aggressive with Office 365 was the possibility of cannibalization. Office 365 could potentially cannibalize sales of their standalone office suite.
A few thing have happened that might have changed their minds.
- Adobe has been very successful with their Adobe Creative Cloud.
- Microsoft’s new CEO is a cloud guy.
What are the trends?
These are the trends that I think we are beginning to see.
- Google’s strength in advertising will no longer be sufficient to maintain an advantage (based on cost) in the cloud. Cloud costs have gone so low that advertising is no longer necessary for a free/low-cost service. Subscription services are proving to be a good business model.
- With the price issue becoming less of a concern, competition in the cloud will focus more on features and usability. In established markets, one feature that will continue to be extremely important is compatibility with de-facto standards (both in file-formats and user interface).
- As the focus shifts to features and usability, native applications will maintain their advantage against web apps.
Naofumi Kagami 
Funny that they decided to do this just after Google announced editing of Office files. I wonder if they will regret the move. It seems like you can have the best of both worlds with Apps as you can use Office for the Google price (much cheaper)
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Yeah, of course they might. However, I don’t think Google Apps’ ability to edit Office files is nearly enough.
After reading at a few more articles, it seems to be the case that they could not wean their students and faculty off from MS-Office. Even though Google Apps became the university-wide standard, their users still wanted to use MS-Office. The university could not simply say “No, you must use Google Apps.” As a result, the university had to buy MS-Office packages and was also constantly worried about any piracy that their students might commit.
Google Apps may be “good enough” for the majority of people. However, as long as there are people within the organization who insist on it, the university must provide MS-Office.
I don’t think Google Apps will ever be “good enough”, especially compared to the native MS-Office applications. There will always be a significant amount of users who need it for complex tasks, or to reliably exchange documents with people outside the organization.
Of course, in a more controlled and closed environment, it will be easier for IT to enforce Google Apps. For example in lower education, students will only have to use Google Apps for simple school assignments. Also, if you are forcing students to use Chromebooks, you don’t have to worry about them pirating MS-Office.
In higher education or in corporations where complex stuff is necessary, I doubt Google Apps will ever be “good enough”. You will need at least a few copies of MS-Office in the organization, at which point, you might decide that it’s a better idea to use Office 365 for everybody.
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Thanks for your response. We will have to wait and see. Sometimes it’s frustrating to see how slow companies adapt to change. They are still forcing employees to use internet explorer and PC centric software, when most people are moving to devices and the cloud.
Office 365 is trying to adapt but I am hearing that the online versions are far from the desktop versions. We will see how the Woolworths experiment goes in Australia as they are deploying 8000 Chromebooks and they have moved all their operations to Google Gmail and Apps.
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In the case of Nihon Univ. they chose the plan that allowed every user to install the desktop application version onto 5 machines. So it’s not only the web version of Office 365 that they have access to.
I agree that web version Office 365 probably lags in features, so if the web version was all that was available for the price, Nihon Univ. might not have switched.
Corporations like Woolworths, especially if they deploy Chromebooks, will not have piracy issues. You simply can’t install MS-Office desktop on a Chromebook. Corporations can control their environments much more easily. Furthermore, they can effectively restrict what their employees can do on company-provided machines. Not so with universities.
Regardless, the most interesting aspect is that Microsoft is now both capable of and willing to price Office 365 low enough to re-capture Google Apps users; i.e. Google has essentially lost most of its price advantage at large accounts. With price difference becoming less of an issue, Google will find it more difficult to snatch away Microsoft accounts, and will also find their accounts being taken.
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