Microsoft has been in the news recently for all the right reasons mostly. The company is about to release its next generation Windows operating system for PCs later this month, after a the lukewarm response to its Windows 8 operating system that was released back in 2012. While a lot hinges on Windows 10 and the next version of Office that's scheduled to be released next year, Microsoft over the years have diversified from being just a two trick pony, even though Windows and Office between them still provide the company with the largest chunk of its profits. Even if you disregard the company's hardware division responsible for Xbox, Windows phones and computer peripherals, the enterprise software services division is one area where Microsoft has been putting a lot of emphasis on, over the past couple of years, after having identified the sector as an area of high growth.
However, at a time when Microsoft is trying its level best to come up the next big idea, now that the desktop PC market has shrunk drastically over the past few years, the company has been dealt a big blow by a Government department in the UK. According to British publication The Register, Her Majesty's Revenue and Customs (HMRC) will now switch all 70,000 of its employees from Microsoft's software to Google's online services, in the process, becoming the third major high-profile government department in the old country after the Cabinet Office and the Department of Culture, Media and Sport (DCMS) to jump onto the Google bandwagon, leaving Microsoft in the lurch. Intriguingly, HMRC is the very same department that looks into implementing tax-compliance for companies reluctant to pay taxes on their UK earnings, informally dubbed the Google Tax.
The report says, the Cabinet Office already has 2,500 Gmail users, but most of the 450,000 civil servants in the UK are still using Microsoft's products. Last week however, the UK government decided not to pay any more for Microsoft's extended support for Windows XP, which has now been out of mainstream support for about a year. An HMRC spokesman said that the department has an "ambitious digital future planned", for which, Google's services will be best suited, going forward. He also claimed that HMRC has already run a "successful pilot" before awarding the contract to Google. Meanwhile, Google UK's head of public sector sales, Mr. David Fitton was understandably upbeat on his LinkedIn profile, when he posted "The acceptance by HMRC that they can store OFFICIAL information offshore in Google data-centres represents a major change and endorsement of Google's approach to managing sensitive information".
Now that sections of the public sector have started ditching Microsoft for Google, it remains to be seen whether this is the start of a broader trend that will catch on, or if this just a minor blip on Microsoft's radar. Now more than ever, Microsoft needs to get things right with its Windows 10 if it wants to remain relevant in the future, either for enterprises or for consumers.