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Google is escalating an attack on Microsoft's lucrative Office software in an attempt to hit its longtime rival where it will hurt the most.
The assault is targeting companies and government agencies paying for Microsoft's suite of word processing, email, calendar, spreadsheet and other Office programs. If they dump Microsoft, Google will give them free use of a package of its competing software that normally costs $5 or $10 per user each month.
The price for the "Google for Work" software will be waived for the duration of the defecting customers' existing contracts with Microsoft or any other supplier. The offer is open for the next six months in the U.S. and will eventually be extended to other countries.
Google is limiting the free usage to 3,000 people per defecting customer. Even with that restriction, Google will be foregoing $180,000 to $360,000 in annual revenue if a company with 3,000 people signs up for the offer. As an additional incentive, Google will pay up to $75,000 to each company switching to its software to cover the costs of making the change.
Google, now owned by a newly formed company called Alphabet, declined to say how much it has budgeted for its latest assault on Microsoft. Google says more than 600 companies have at least 10,000 employees using Work software.
The offer underscores Google's confidence in the quality of its software and its resolve to undercut one of Microsoft's most valuable franchises, said Aragon Research analyst Jim Lundy said.