Get ready now: Your office will be in the cloud within a decade

Most workers will be using cloud based office packages within the next decade, although mostly it's smaller organisations making the jump now.
Written by Steve Ranger, Global News Director on

Within 10 years, most organisations will have switched to cloud-based office packages such as Microsoft's Office 365 or Google Apps — even though right now most early adopters are small businesses.

Analyst house Gartner estimates there are around 50 million enterprise users of cloud office systems, but this accounts for less than eight percent of overall office package users.

But a major shift towards cloud office systems will begin by the first half of 2015 and reach 33 percent of users by 2017, and within 10 years, two thirds of workers will be using cloud-based productivity packages.

Google has made much of the running with Google Apps, but Microsoft is also keen to move customers to a subscription model which it sees as the future of software and recently announced it has reached the one million subscriber mark with its Office 365 Home Premium product.

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However, Microsoft has also said that it might take a decade for it to switch purely to the cloud model for Office.  

Gartner seems to have roughly the same timescales in mind, and said most current users were small firms, although a few were large or very large enterprises.

"Be careful interpreting 'trophy wins' promoting either Google or Microsoft's victories in huge organisations," Gartner said. "They are anecdotes. Although they are interesting, there are too few data points to constitute a good sample from which to draw major inferences. Also note that some of Microsoft's large account wins are still supported from dedicated hosted systems, not multitenant cloud-based services."

Gartner said neither Google nor Microsoft was dominating: "Both parties are winning some and losing some engagements. Both parties have substantive benefits and hidden liabilities. Invest based on needs, not on perceived market momentum."

One big factor encouraging enterprise customers to move to the cloud is the huge increase in the number of devices workers use to access office applications, thanks to bring your own device. When cloud office packages first appeared in 2007 workers would use one device, their desktop PC, to access email. Now they are using at least four devices — smartphone, tablet, work PC and home PC — to access their organisation's office system capabilities in a single week. 

This is pushing organisations towards cloud office systems as they can reduce the IT burden of software installation, maintenance and upgrades. The number of devices is important for another reason: while on-premise office packages are often sold on a per-device licensing model, cloud office systems are typically provisioned to each user, not to each device.

As Gartner points out: "For knowledge workers who are increasingly using multiple devices, moving to a per-user (not per-device) payment scheme can lead to significant savings if the customer would otherwise have to licence (or buy subscriptions for) each device under older, per-device licensing approaches."

The analysts also point out that organisations with many devices shared between workers — as in the banking and healthcare industries — may be better off licencing or subscribing by device.

Levels of usage of cloud office packages vary by industry: higher education, discrete manufacturing, retail and hospitality, are significantly more likely to be early adopters. Defence, financial services and healthcare are among those least likely to get involved.

"Although it is still early in the overall evolution of this cloud-based segment, there are many cases where businesses — particularly smaller ones and those in the retail, hospitality and manufacturing industries — should move at least some users to cloud office systems during the next two years," said Tom Austin, Gartner vice president.

Gartner said waiting for a couple of years might be shrewd for some, to give vendors more time to really deliver on their promises. Companies might want to start with workloads less critical than email, such as email archiving and spam and virus filtering, or by moving segments of the user population to cloud office systems while retaining an on-premise approach for others.

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