Microsoft this morning released a new version of Office 365 for businesses and said the paid subscription service has become one of the fastest-growing businesses in the company’s history — now used by 20 percent of its largest customers, up from 15 percent a year ago.

This is the latest step in the company’s move to expand beyond traditional licensed software for Word, Excel, PowerPoint, SharePoint and many other Office programs. With the new release, Microsoft announced a series of new Office 365 business subscriptions ranging from $144/user per year to $180/user per year.

The new packages include features designed to help IT departments to better manage Office 365 settings inside companies.

Microsoft is aiming to fend of rivals including Google, which touted its own growth on the eve of the Office 365 update, saying that more than 5 million businesses are now using Google Apps. The price for the premium Google service is $50/user per year. Google is holding its first Enterprise Global Partner Summit this week, and says its community of apps resellers doubled in 2012 to more than 600.

Microsoft didn’t give specific customer numbers but announced three new enterprise customer wins: the Hamburg Port Authority, Midroc Europe and Sephora USA, who join existing business customers including the state of Texas, Toyota, Tesco, Barilla America and the International Federation of Red Cross. Microsoft said the number of small and midsize businesses using Office 365 has grown by 150 percent over the past year.

Ed Bott of ZDNet has a detailed look at the Office 365 business subscriptions.

Microsoft in January expanded Office 365 with a new subscription for consumers.

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  • Guest

    Congrats to Microsoft on the release! To say that Google Apps compete with Microsoft Office is like to say that the homeless man who sleeps in the gutter competes with Channing Tatum. Although Microsoft Office, the Channing Tatum of professional productivity software, doesn’t need to improve, Microsoft continues to invest in the platform that literally trillions of dollars flow through every single day. Bravo.

    • Paul

      Apps is nevertheless a winning strategy for Google. Not only has it provided them with what is now a fairly substantial source of incremental profit, it has caused MS to invest more in R&D and selling time/discounts trying to keep existing customers loyal. In fact it’s basically the strategy MS attempted against Google with Bing, only it’s been successful.

  • This giant is dying

    Congrats to MS on waiting until Gapps became an imminent threat before embarking on what they should have done on their own. Gmail could have been defeated at inception by simply fixing and innovating with Hotmail or doing that while rebranding it (as they were ultimately forced to do). But no, better to first let Gmail displace Hotmail as the de facto choice among anyone under 35, and then leverage that success to drive Gapp adoption before fixing Hotmail or getting serious about a web-based Office. This inspired “leadership from the back” attitude, which gets repeated across the org, is what has made MS increasingly irrelevant and cost it its growth and historical lead in revenue, profit, and of course market cap, where the stock has been dead money for more than a decade. Bravo to Steve and MS’s board. You’ve managed to systematically cripple the industry’s most successful company in just thirteen years.

    We love our strategy – even as it kills us.

    • WellPlayed!

      I would give you a plus 10 for style on this if I could!

    • Aaron Evans

      In the year 2000… Microsoft was on the ropes. The DOJ was hammering them, NT5 was a failure, Linux was taking over the server and making inroads to the desktop, Sun was running the enterprise and Apple was coming back from the dead.

      Now, I don’t think Microsoft is doing so great, but if you’d asked me thirteen years ago if Microsoft would be as dominant on the desktop today as it still is, I wouldn’t have believed it.

      So as bad as they are at technology, Microsoft’s management deserve some credit for keeping the company afloat for 13 years.

      • Guest

        That was under Gates. They were on the ropes in 95 too (Internet, DoJ) and survived.

        Gates had vision.

        They don’t have Gates.

  • guest

    Shouldn’t MS be telling this story, along with the WP and W8 tablet one, at Mobile World Congress where they’re a premier sponsor but don’t even have a booth?

  • WaitForTheBoom

    Rivalry with Google. That statement alone shows how much they have faltered. WordPerfect, Lotus, OpenOffice and a host of others. And who ends up being the most credible threat to their biggest cash cow? The successor to Lycos and AltaVista.

    So sad it’s really sad. This company couldn’t make Microsoft Access out of nothing and blow away the competition. This company can’t even come up with a credible 3rd place for mobile phones. Blackberry is about to knock them into fourth.

    If you live in Seattle you’d better be thinking about what happens in June when the 30% layoff plans are rolled out. I’ve seen them. It is coming. And you know Steve Ballmer, Brad Smith and Kevin Turner aren’t on those lists.

  • Aaron Evans

    There are approximately zero people paying $50/year for Google docs. But, they’re feeling their way towards force people into paying for email since they have so much of it held hostage. Keep local backups and control your domain name.

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