When Microsoft reported its third-quarter financial results last week, company officials trumpeted several metrics about sales and adoption of Office 365, the cloud subscription suite for email and collaboration.
Specifically, Microsoft said that Office 365 "net seat additions" grew five times compared with the same quarter last year, and that 25% of the company's enterprise customers now have Office 365, which is now on a $1 billion annual revenue run rate.
However, Microsoft isn't saying how many Office 365 seats it has sold. Moreover, the 25% enterprise adoption stat includes both instances where the suite has been widely deployed and scenarios where it may be used in a limited fashion.
"It's a big claim to say 25% of enterprises are using Office 365," said Michael Silver, a Gartner analyst.
CFO Peter Klein highlighted several times during the earnings conference call the Office 365 metrics, saying they reflect strong momentum and indicate that the suite "is really starting to get scale."
However, when he was asked during the question-and-answer part of the call if he could give a concrete number for users, he declined.
With this Office 365 momentum statement, Microsoft is trying to continue the buzz around the suite, which it sees as the future of its on-premises server products like SharePoint, Lync and Exchange, and of its desktop productivity applications likes Word, Excel and PowerPoint.
As customers who have those products installed in their servers and PCs are faced with the need to upgrade them, Microsoft wants to be there with its Office 365 cloud-hosted option, and prevent Google from swooping in with its rival Google Apps cloud suite.
However, the momentum claim would carry more weight if Microsoft backed it up with more specifics.
"It would be nice if Microsoft gave more detail because one out of four customers haven't moved to Office 365 to a large extent," Gartner's Silver added. "What you're seeing is probably a lot of trials. It's hard to tell what that number means."
One should also take into account that in the past six to nine months, Microsoft has offered various Office 365 incentives to channel partners and special prices to enterprise customers and consumers. It remains to be seen how sales and adoption will be affected once the incentives and offers end.
Another factor that could be boosting Office 365 adoption is upgrade migrations to it from several of its legacy cloud collaboration and communication suites like Office Live Small Business (OLSB), Business Productivity Online Suite (BPOS) and [email protected], all of which Office 365 has replaced or is in the process of replacing.
In addition, Office 365 comes in many different versions, packages and prices that range from an email-only option to jam-packed bundles that can include the cloud-hosted versions of Exchange, Lync and SharePoint, as well as the desktop productivity applications delivered and updated from the cloud.
Thus, it's hard to know with precision not only how the suite is being used and to what extent which of its versions and specific components are proving more or less popular, said TJ Keitt, a Forrester Research analyst. Some customers could be using only one component while others could be using several, he said.
It's also worth noting that Microsoft defines "enterprise customer" as companies with 250 employees or more, so the stat doesn't necessarily give a snapshot of the suite's rate of adoption in very large organizations with tens of thousands of employees.
At Forrester, the definition of "enterprise organisation" is one with more than 1,000 employees, Keitt said. Lowering the bar to a minimum of 250 employees allows Microsoft to qualify many more companies as enterprises for the purpose of this stat, he said.
Microsoft has been clear from the start that Office 365, which began shipping in the summer of 2011, has been particularly successful among smaller companies, specifically those with 50 users or less, which account for about 90% of its customer base.
"I don't doubt there's growth and interest. Just from what we see in our client inquiries, there are a lot of businesses that are seriously considering Microsoft's Office 365 and Google Apps for cloud collaboration and communication," Keitt said.
Microsoft has also done a good job of publicizing large Office 365 deployments among businesses, government agencies and universities, he said. These featured case studies involve tens of thousands of users, and even in some cases more than 100,000 users.
What's not exactly clear is which type of company is driving the growth. "Is it the midmarket? Or a combination of the midmarket and large companies?" he said.