Microsoft pumps cloud, trumps Google with GSK

With a 100,000-seat deployment by drugs company Glaxo SmithKline, Microsoft Online Services has stepped up its validation of cloud applications at the same time as making Google's online application efforts look small by comparison.

Announcing a 100,000-seat deployment by pharmaceuticals giant GlaxoSmithKline (GSK), Microsoft Online Services — the software vendor's hosted Exchange, Sharepoint and LiveMeeting division — today stepped up its validation of cloud applications at the same time as making Google Apps' 15,000 seats at biotech leader Genentech look small by comparison.

Not only that. Ron Markezich (pictured), corporate VP of Microsoft Online Services, was scathing of Google's efforts to make headway in the enterprise market. "Google we really do not feel is ready for the enterprise," he said in a call briefing bloggers on the announcement an hour ago. "They're offering three-nines SLA and they've missed three of the last six months," he added, referring to last week's Gmail outage and earlier incidents. In a sideswipe at Google's offer of a 15-day credit for last week's outage, he went on to add that Microsoft maintains its services at four-nines availability, while backing up its three-nines SLA with financial penalties: "We don't just give service credits, we give hard dollars if we miss an SLA."

He went on to dismiss Google in terms that made the search and contextual advertising giant sound like little more than a minor irritation in Microsoft's competitive landscape. "Pretty much all our major customers are trialing Google Apps, but they're buying Microsoft Online Services," he said, reeling off a list of blue-chip names that have recently signed up for Microsoft's online applications — Phillips, Ingersoll Rand, Pitney Bowes, Aviva. Those others who had chosen to go with Google had made a poor choice, he went on to imply. "They've just chosen to take email and use a consumer service that's not enterprise-ready," he said.

The GSK news has been timed to coincide with the launch of Online Services in nineteen countries worldwide (also see Mary Jo Foley's write-up), along with the release of the Office Communications Online instant messaging and presence service ahead of its original schedule. The new services are available to sign up in beta now and will become paid services in early April.

GSK's previous system is a Lotus Notes/Domino system, in combination with Google's Postini mail filtering service, making it a win Microsoft can celebrate on two counts. "If a customer like GlaxoSmithKline comes over to Microsoft Online Services, then any customer in the world can," said Markezich. "It's a highly regulated customer in a highly regulated industry." Microsoft is also keen to highlight its ability to host data in geographic locations to adhere to regional privacy laws, such as those in the EU and Argentina.

Markezich predicted more wins in the coming months. "With the deterioration of the economy we've had a ton of interest," he said, reiterating his division's claims that customers save from 10% to 50% when they adopt online services, depending on whether they move from in-house hosted Microsoft products or from a competitor platform such as Lotus. "I'd expect in the next couple of months some of those large customers that might have never considered online services before will move to Microsoft Online Services in the next few months," he said.

Would a customer like GSK ever move back to on-premise servers, I wondered? No, not at all, replied Markezich. "What we've seen with all of our customers is, they always come and say, how can I move more of my applications to the cloud?" Far from being fazed by the notion, Microsoft is well placed to satisfy those requests, said Markezich. "There's not another company in the world that's going to have the breadth of cloud services Microsoft can provide."

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