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A Field Report from the Great Office 365 Migration

Peter Bauer's perch offers a commanding view of one of the greatest migrations in the history of IT -- the movement from on-premises Microsoft Exchange servers to Office 365.

Bauer is chairman and CEO of Mimecast, which provides e-mail security and data security products. Much of the company's business involves layering security and archiving onto Microsoft Office 365, and the company has been building a business on the Microsoft cloud productivity trend for years.

In the earnings call about the company's third quarter results on Monday night, a financial analyst noted that Mimecast reported that 29 percent of its customers are on Office 365 and asked how Bauer saw the Office 365 opportunity progressing in the future.

The ideal source for that information would be Microsoft, but the software and cloud giant rarely provides straight numbers from quarter to quarter, and even more rarely discusses the overall universe of Exchange seats.

In answering, Bauer said he believes Mimecast's customer base is a pretty good proxy for Office 365 adoption.

"When we talk about [Office 365] in the context of the broader Microsoft Exchange ecosystem, we estimated somewhere between 300 million and 350 million corporate e-mail users using a Microsoft-type solution for e-mail," Bauer said, according to a Seeking Alpha transcript of the call.

Bauer's figures roughly align with what Microsoft has publicly revealed about Office 365 monthly active users, which hit 120 million worldwide in October. Given Mimecast's estimate that about a third of the overall Exchange universe is on Office 365, the figure passes the back-of-the-envelope test.

Looking forward, Bauer said, "I don't know what the sort of saturation level is in terms of Microsoft's customers moving over. But if one assumes that 75 percent of the market is ultimately on [Office] 365 and if we're sort of a third of the way there after five-plus years of migration, [it] is probably at least another five maybe more years of migration that goes on in the markets."

In the face of Microsoft's vagueness, these estimates from Mimecast, a company with a lot at stake financially in the getting the right answer to the question and a sizable user base of its own to compare against, provides a valuable field report from the overall Office 365 migration.

Posted by Scott Bekker on 02/14/2018 at 8:57 AM


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