Microsoft claims 35% of Exchange installed base is now on Office 365

In an attempt to catch up with everything that happened at the recent Microsoft Ignite conference, I listened to the Channel 9 recording of a session called “ Extending Microsoft Office 365 Visibility, Security and Compliance: Office 365 ManagementAPIs ”, which featured the interesting claim that 35% of the Exchange installed base is now on Office 365 (see graphic). The same presentation also stated that some 1.2 million customers now use Office 365.

ITPro Today

May 26, 2015

2 Min Read
Microsoft claims 35% of Exchange installed base is now on Office 365

In an attempt to catch up with everything that happened at the recent Microsoft Ignite conference, I listened to the Channel 9 recording of a session called “Extending Microsoft Office 365 Visibility, Security and Compliance: Office 365 Management APIs”, which featured the interesting claim that 35% of the Exchange installed base is now on Office 365 (see graphic). The same presentation also stated that some 1.2 million customers now use Office 365.

The news was interesting because this is the first time that I am aware of a Microsoft speaker quantifying the impact of Office 365 on the overall Exchange installed base. It’s unsurprising in some ways because Exchange is the #1 workload running inside Office 365 and the prime reason for many organizations to move to the cloud, but 35% seems a tad high when compared to Microsoft’s last set of financial results and previous estimates of the size of the Exchange market.

The last time I wrote about this topic was just before Ignite and referred to a report by Mary-Jo Foley of a statement by Microsoft saying that they have 50 million active monthly Office 365 customers. That seemed low to me because the financial results (a $6.3 billion annual run rate for commercial cloud services) indicated that the number could be much higher at around 90 million. Of course, the important word in the Microsoft statement is “active”; given that we are in a time when migration activity is intense, I bet a lot of mailboxes are inactive because they are in the process of being provisioned or migrated to the cloud.

Returning to Microsoft’s claim, various consulting companies have attempted to chart the growth of the Exchange installed base over the years. The most persistent of these is the Radicati Group, which has consistently sized the base at well over 300 million seats. Taking that number, Microsoft’s claim indicates that they put the number of Exchange Online users at more than 105 million. That claim doesn't seem to be supported by the reported revenue unless an awful lot of free or low-cost seats are included. Or perhaps we have been using inflated estimates of the size of the Exchange installed base.

All of this demonstrates once again that numbers can argue any case. It’s likely that no one has totally accurate information to say precisely how much of the Exchange installed base has moved, but it’s fair to say that a lot have moved and that the move is accelerating.

Follow Tony @12Knocksinna

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