Report: Nearly one-third of Office 365 customers also use G Suite

Microsoft and Google are archrivals in the market for cloud productivity tools. But a new report by cybersecurity firm Okta suggests that many companies are using software from both vendors side by side.

In 2019, roughly 31% of Okta customers with Microsoft Office 365 also used Google G Suite. That's up from 28% the year prior and 21% in 2016. Okta generated the report by analyzing app usage by more than 100 million users across 7,400 organizations.

The report doesn't provide insight into how many individual employees used both suites, only how many businesses had integrated the products with Okta's cybersecurity software.

Analysts were surprised at the high percentage of Office 365 customers using G Suite but said it was not uncommon for companies to use both suites.

"We have been seeing that people don't use only Office 365," said Jeffrey Mann, analyst at Gartner. "We do see it that people will use both." 

Some companies buy cheaper G Suite licenses for employees that don't need every app and feature that comes with Office 365, said Irwin Lazar, analyst at Nemertes Research.

Also, many businesses use G Suite's Google Docs to share files externally, even if they use Office 365 internally. Google's product is generally considered better for external collaboration.

In still other cases, IT departments may have opted to let a portion of their workforce continue using G Suite rather than force users to abandon familiar software. Some users may prefer a G Suite app over an Office 365 app for a particular purpose, Mann said.

The rise of G Suite within Office 365 shops mirrors a broader trend. Businesses are using more apps than ever before. Because the cloud has eliminated upfront investments, companies have more leeway to trial apps, and to let users keep the best ones in each category.

For example, the use of Slack and Zoom among Office 365 customers has also grown over the past few years, even though Microsoft's suite includes apps for messaging and video conferencing. In 2019, 32% of Okta's Office 365 customers used Zoom and 31% used Slack.

Okta customers had 88 apps on average in 2019, up from 72 apps in 2016.

The report also found that G Suite's active user count grew faster than Office 365's in 2019. Monthly active users were up 50% for Google and 38% for Office 365. But the vendors signed new customers at roughly the same rate: Thirty-seven percent growth for Google and 36% growth for Microsoft.

However, Okta's numbers may not be representative of the market. Okta makes single sign-on software, which lets companies set security policies across multiple apps. Businesses with software from numerous vendors -- like from both Google and Microsoft -- are more likely to be customers of Okta.

Also, Okta's customers are mostly small and midsize businesses. Only around 17.6% of Okta's 7,400 customers contribute more than $100,000 in revenue annually, according to a recent earnings call. G Suite tends to be more popular among small businesses, while organizations with tens of thousands of employees use Office 365.  

The report found that Office 365 had the most customers by far, followed by Salesforce, AWS and G Suite. Microsoft's suite also had the most monthly active users, trailed by Workday, ServiceNow and G Suite.

Okta's findings are consistent with other market research on Office 365 and G Suite, which has found Microsoft with a strong lead against Google. Wanting to close that gap, Google has added in recent years communications and collaboration apps to G Suite and given IT admins more control over user policies.