How Microsoft Lost Consumer Calendaring to Google
TL;DR Where I first show that consumers, freelancers, and small-business owners who use digital calendars in the cloud overwhelmingly use Google Calendar rather than a Microsoft-based solution (who used to dominate the segment) and then show why.
It’s been an intense six months for the MileLogr.com team. Our product is tied to the U.S. tax season (the three months ending in April 15) when 140 million taxpayers settle accounts with the tax man (aka IRS). This was our first season in the market after a three-month Beta period. We help taxpayers who are self-employed or own small businesses prepare mileage logs to show how much they used their personal vehicles for business so they can take the appropriate tax deduction (on avg. $0.55/mile).
So what do mileage logs have to do with calendaring? Rather than fiddling around with odometer readings or GPS we offer users a novel, much easier approach to building a mileage log. If you use a digital calendar to record business meetings and errands (even occasionally) MileLogr will read your calendar for the entire past year and reconstruct a daily route of where you traveled. Of course there are lots of route variations and we have options to account for that. The best thing is that you don’t have to remember to turn on a GPS or record the fact that we just took a trip in a log or on your smartphone(most people simply forget or find the overhead overwhelming). The route is there for you to review without having done anything explicit to make that happen.
A consequence of our approach is that we have a unique perspective into what calendaring apps our customers use in aggregate. Our product now supports all major online/server-based calendars: Google Calendar, Microsoft Exchange, Hotmail, Outlook.com, Yahoo! Calendar, iCloud Calendar, or any other CalDAV service. To survive up to the point where we could build all these integrations over the last 18 months we were forced to do some heavy prioritization and since we are a Lean Startup, we started with several hypotheses. It wasn’t just about which calendar providers we should support but also how deep should we integrate with each feature set (recurring appointments? multiple calendars per account? appointments categories?).
Our MVP was the first stake in the ground. The hypothesis was that Outlook/Exchange was used by Gen X folks who mean “business” and Gmail was popular with Gen Y. So we released the MVP, just in time for 2012 tax season, with basic support for calendars on Microsoft Exchange (self-hosted and Office 365) and Google Calendar, in this order. Boy, were we wrong! Here’s what our stats show, a year later, during the 2013 tax season quarter:
Exchange slice includes self-hosted and Office 365. Live slice represents Outlook.com and Hotmail. Even when you combine the two categories, Google Calendar usage surpasses calendar usage based on Microsoft products 3:1.
Fun fact: the little sliver of iCloud users are actually our best paying customers! Percentage-wise, the highest percentage of users who buy the buy the product after trying it out are iCloud Calendar users followed by Google Calendar users. I speculate that users of iCloud are folks who are fully bought into the Apple mobile ecosystem and the products integrate so well that the resulting data that’s generated is more suitable to the scenario we’re optimized to solve.
So, how did Microsoft lose consumer calendaring to Google? Two reasons: (1) difficult to use cloud collaboration features in Office apps and (2) missing out on increased cloud calendar usage in late 2000s, driven by a good attach rate to webmail. Allow me to expand.
(1) Up until a few years ago I’d say, desktop Outlook was THE sh*t when it came to the home office organization, having won the PIM war of the 90s. As we moved to cloud services the Microsoft Office division made the mistake (or rather was blinded by the Innovator’s Dilemma, Netdocs RIP!) of thinking Web apps are about moving the app from the desktop to the browser. They made fun of Google Docs for not being able to do copy and paste right (perhaps still proud of the OLE technology in in Windows 3.1 that enables inter-app copy & paste), they resisted as much as they could, and eventually gave in and begrudgingly built the Office Web Apps. Except in 2013 those web apps still miss the point of a cloud-based Office suite which is amazing, easy-to-use collaboration features given that the data is in the cloud and hence available in real time to all who want to work together.
But wait! you say, “improved collaboration” has been a key selling point of Office 2007, 2010 and 2013. To which I say, yes, but that refers to improved collaboration for enterprises that use SharePoint on the backend not for consumers. For consumers collaborative features are overlaid on SkyDrive and that only happened in 2012, long after Google Apps won the heart and minds of how collaborative document editing is done in the cloud. And it’s not exactly a slam dunk. Not having learned from the failed docs.com + Facebook attempt Word Web App is still missing one of the most basic collaborative features: Insert Comment. I don’t know if this is an oversight or intentionally kept for the premium experience (when you own desktop Word) but if you think commenting is a premium feature you don’t get cloud collaboration. Here is it, front and center in Google Docs:
As for collaborative calendaring (think spouses, family, PTA, clubs, business partner scenarios) desktop Outlook has a Publish/Subscribe calendar feature which would work well if you can get past the high friction requirement that you need a Windows Live ID (now Microsoft Account) for both publisher and subscriber. Why high friction? Because if you had a Microsoft Account you wouldn’t need the feature in the first place since most likely you’re already using Hotmail/Outlook.com and you can share much easier from with the webmail app.
(2) Which brings me to the second factor that led to Microsoft losing consumer calendaring: webmail attach rate. Calendaring at its core can be split into two main scenarios: managing your own time and coordinating time with others. Desktop Outlook has been dominating the former scenario. The latter however requires a way for you to send someone an invite when you want to schedule a meeting.
A calendar by itself doesn’t know how to communicate with others. It turns out that the simplest solution is to pair the calendar with email so that meeting invites can be auto-magically delivered over email. That however requires that your email and calendar are integrated which is has not been the case for consumers traditionally due to the large variety of email and PIM apps. Enterprises however can standardize leading to a fantastically easy and productive solution (a 90s category called groupware) and a fantastically great business for Microsoft (Outlook+Exchange) and IBM (Lotus Notes, while it lasted).
Enter the consumer love affair with webmail in the 2000s. Before webmail, consumer email was an affair between your desktop email client and an ISP’s server. It used POP3 or IMAP protocols which, for most intents and purposes, have no integration with calendaring. With webmail however, providers have the freedom to add new services integrated with Email because they are in complete control of the front end of the user experience not just the backend server. Calendar and Contacts are two fantastic candidates for such integration. And when Microsoft acquired Hotmail and made it part of MSN it did exactly that. Beautiful!
Except in the mid-2000s Hotmail went through a decline in popularity first due to spam and then due to Gmail. So as consumers were learning to use their calendar to coordinate time with others they were doing so on Gmail not on Hotmail. And that is why at MileLogr we should have prioritized integration with Google Calendar not Exchange/Office 365. The things that you learn as you get older…