Microsoft has been expanding its Office 365 customer base consistently since the launch and has signed up a lot of enterprise giants as well as SMEs for Office 365. Office 365 offers much better features than Google Docs and is also compatible with the traditional Office suite, which is one of its main selling points.Though Office 365 has lower operating margins than the traditional packaged Office software suite with increasing scale, Microsoft has been able to continually reduce its hosting costs by spreading them out over the larger user base.
Last week Microsoft announced a series of price cuts for Office 365, effectively reducing its average enterprise pricing by around 20%. By passing on its savings to customers, it aims to capture a dominant market share even in the cloud Office market, just like it does in the desktop productivity software market.
Source – Etrade.com