Microsoft says more than 25 percent of Office 365 licenses now sold through Microsoft 365

Microsoft has a multi-pronged plan to try to move customers of Windows, Office and enterprise mobility = security point products to its M365 bundle.
Written by Mary Jo Foley, Senior Contributing Editor
Credit: Microsoft

t's no secret that Microsoft is working to get more of its business users to buy Windows, Office and its mobility/security offerings as a single subscription bundle, rather than as separate point products. The company has a few different strategies it's pursuing to try to make this happen.

One of those strategies involves using the individual components of the suite -- Windows 10 Enterprise, Office 365 and Intune -- as a foot in the door. Office 365 is currently the biggest piece of Microsoft's commercial-cloud revenue bucket. And currently, more than one-fourth of Microsoft's Office 365 purchases are coming through Microsoft 365 . 

That new statistic comes from Microsoft Corporate Vice President of Microsoft 365 Marketing Jared Spataro, who shared it during his February 12 appearance at the Goldman Sachs Technology and Internet Conference.

Microsoft said last fall that Office 365 commercial monthly active users hit 200 million. The company has not shared for a while the number of Office 365 commercial licenses or seats sold. Microsoft also has not released any real Microsoft 365 sales or usage figures. We do know that Microsoft 365 is a growing part of the "Windows Commercial Products and Cloud Services" category which it highlights each quarter in its earnings -- a category which grew 25 percent (of some unreleased number) in Microsoft's FY20 Q2.

During his remarks at the Goldman conference this week, Spataro told attendees that Microsoft considers Microsoft 365 to be all about three pillars: Personal productivity; organizational productivity; and security and compliance. By moving beyond just selling Word/Excel/PowerPoint, Microsoft is "tapping into new budgets," he noted, although it's encountering longer sales cycles. He said Microsoft is looking to expand its total addressable market further with products like its coming Knowledge Management service, known as "Project Cortex."

Spataro said Microsoft is very happy with how it's doing selling its Teams group chat/collaboration product. He called Teams a "canvas for projecting the best of Office 365." He said Microsoft believes Teams has a solid story in competing with various "best in class" point products, and also in acting as the central, integrated communications hub that is a single, cohesive platform. In November, Microsoft disclosed that it had 20 million daily active Teams users.

Microsoft is looking at first line and mobile first workers as becoming key growth drivers for Microsoft 365. 

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