Google and Microsoft both announced updates to their email services and apps recently, offering up a new crop of features and fresh designs. For consumers, the e-mail services are largely free to use, so why are Microsoft and Google still locked in what appears to be a heated horse race over e-mail?
The answer comes down to a very large number of enterprises that haven’t updated their productivity software in years and are expected to eventually switch to cloud suites like Microsoft Office 365 and Google’s G Suite. By investing in free email now, the companies hope to lure enterprises to those more lucrative productivity apps later.
“Email is still a very large tool for businesses,” said analyst Patrick Moorhead of Moor Insights & Strategy. “Sure, chat-based workflow (like Slack) is new and cool, but it’s also very small right now and needs to be augmented by email. Both (Microsoft and Google) are upping their game to be more useful tools to people. Google uses mail as a front door to mine data and create profiles where Microsoft is focused on driving preference for their productivity tools.”
A survey of IT pros found that 68 percent of companies are still running at least one copy of Office 2007, which Microsoft stopped supporting last fall. In addition, the survey, by the IT pro online community Spiceworks, found that 46 percent of companies are still using at least one instance of Office 2003 and 15 percent are running Office XP.
Moorhead said “none of these companies ‘win’ the big ‘future of work’ prize with email, but they need to be constantly improving the experience and capability as email is still a critical tool.”
Most growth in email usage has been in mobile devices, but use of webmail has also been increasing, growing 4 percentage points in the past year to a total of 31% of all opened e-mails, according to, Litmus Email Analytics. Gmail has been the biggest driver of that growth, with 21 percent of market share, up from 16 percent in 2015, according to a Litmus study.
Microsoft introduced bill pay reminders in Outlook.com, its email and calendar. Outlook also serves up suggested locations for meetings as well as improved RSVP tracking.
Google, which generally targets consumer e-mail users, introduced features designed to appeal to workplace users. In addition to a fresh design and added smart replies, G-mail can now snooze emails so they pop up again later.
But it will be difficult for Google to significantly undercut Microsoft’s market share, according to Spiceworks analyst Peter Tsai. After dominating workplace productivity for decades, Microsoft’s Office is still the most used productivity software software in the workplace, with 82 percent of companies in the U.S., Canada and the United Kingdom using an on-premises version of Microsoft Office.
By contrast, 17 percent of organizations are using G Suite by Google, and another 16 percent are using Google’s free apps. Three percent of businesses are expected to adopt G Suite and an additional 2 percent plan to adopt google’s free productivity apps, according to Spiceworks.
Tsai pointed out that Microsoft “has been thoroughly entrenched” in companies in virtually every sector of the economy since the 1990s, and that’s not likely to change anytime soon.
Still, he said, Google is a formidable “upstart” that can gain market share over the long haul. For example, he said, Google’s productivity apps are popular in schools. Fifty-four percent of educational organizations are using G Suite, he said. (Twenty nine percent of them are using Google’s free apps, according to the study.)
A strong presence in schools could pay off over time, Tsai said. “Millennials are going to be more influenced by what they used at home,” he said. “It might take a long time for Google to gain more of a foothold. It might happen eventually, but not in the next few years.”