WSJ: Microsoft taking Google’s productivity software very seriously, trying to talk customers out of jumping ship from Office

Microsoft Office, the latest version of which will be revealed later today, dominates the productivity-software market among businesses, with a more than 90 percent stake of the space, according to research firm Gartner. But Google Apps, the search giant’s Web-based answer to Office, represents a real threat to Microsoft’s single-biggest moneymaker, and the software company’s taking it very seriously.

In response to Google Apps, which Gartner says is now the software of choice for one-third to half of new corporate users in the market for Web-based productivity programs, Microsoft has slashed the price of Office 365, its own Web-based software, by as much as 20 percent and tasked a “Google Compete” team with preventing Office customers from jumping ship.

And that team goes to great lengths to ensure businesses stick with Office, according to The Wall Street Journal. In one instance, Microsoft flew a company’s chief information officer out to its Redmond, Washington, headquarters, where it tried to convince him to reconsider his decision to drop his company’s $2 million-a-year contract with Microsoft.

For two days last month at Microsoft’s executive briefing center, Mr. Fuller and his colleagues were shown road maps of Microsoft products, toured a research lab, and saw new technologies, including one that lets shoppers virtually try on clothes, he said.

The man was impressed but ultimately stuck by his choice to embrace Google Apps, which he said was half the price and “cooler” than Office 365, a software suite Microsoft said last week “is our collective future.”

“And make no mistake,” the company added at its Worldwide Partner Conference in Toronto, “Google is out there pitching our customers.”

During the nine months that ended March 31, Microsoft’s Office division accounted for more than half of the company’s total operating profit, generating $11.6 billion.