Microsoft Office is still the de-facto apps suite and market leader in the productivity space. Microsoft is successfully transforming the traditional Office business into subscription business based on Office 365. Office 365 is the fastest growing product at Microsoft in the recent times and it is still growing at a rapid pace. One of the main competitor to Office 365 is Google Apps, now known as Google for Work. Even after 7 years of launch, Google for Work is yet to make an meaningful impact on Office sales. Most of the enterprise wins of Google for Work are in the education space where Google gave away the whole service for free to universities and schools across the world. In order to counter that, Microsoft also started providing free Office 365 services to educational institutions.
In order to grow faster at the expense of Office 365, Google is now planning to increase the commissions it pays some outside firms to sell its Google for Work packages. Currently, Google for Work resellers keep 20% of the revenue. For example, for $50 a year per user; Google charges $40, leaving $10 for the reseller.
Google will increase these commissions for top-performing resellers to encourage them to sign up more corporate customers, help employees use the software, and fix technical problems, the people said.
One of the main reason Microsoft dominating the enterprise space is thousands of resellers, consultants and systems integrators that Microsoft has built over the years. Microsoft recently revealed that there are more than 400,000 partners in 170 countries and they spend more than $5.8 billion a year on the network. Google is aiming to attract Microsoft’s partners with this new commission package. Let’s see how it works out in the coming months.