New Study Shows Microsoft Holds 85% Market Share in U.S. Public Sector Productivity Software

BY Heather Greenfield
September 21, 2021

Washington — A new study conducted by Omdia has found Microsoft’s share in the U.S. government office productivity software market to be approximately 85 percent, more than seven times the share of the next largest competitor. The research report outlines a number of consequences to the U.S. government’s overreliance on a single vendor, including higher costs to taxpayers, less innovation than the private sector and, most importantly, greater risk to the U.S. government for future cyber attacks and national security incidents—particularly in the wake of SolarWinds and Hafnium. 

The Computer & Communications Industry Association and Google commissioned Omdia’s report, “Monoculture and Market Share: The State of Communications & Collaboration Software in the U.S. Government.” Omdia used publicly available historical and current data, demand- and supply-side research, and other statistical modelling. In addition to outlining the risks of dependence on a single vendor, the report also outlines a number of factors that have contributed to Microsoft’s dominant market share:

  • Overemphasis on ease-of-procurement vs. best-of-breed solutions
  • Compliance regimes that favor incumbents and discourage adoption of newer, more innovative technologies
  • The tendency of government buyers to choose products or services that maintain the status quo

The following can be attributed to Omdia’s Tim Banting, Practice Leader, Digital Workplace, an author of the report:

“Organizations need the flexibility and freedom to provide their employees with the tools best suited to do their jobs effectively. If employees don’t use the tools they are given the ROI (return on investment) on which the buying decision is made is money wasted. Furthermore, the continued presence of a procurement ‘monoculture’ within government agencies in communications & collaboration software, limit overall competition and innovation in the public sector.”

The following can be attributed to CCIA President Matthew Schruers:

“CCIA has long emphasized the importance of a diverse technology ecosystem, and governments and their constituents should be concerned about the security ramifications from a single vendor that by Omdia’s calculations comprises 85 percent of public sector collaboration and communications software procurements. It creates a bullseye on the government for bad actors thereby putting the government at a greater risk for a national security incident.”

CCIA intends to support additional research so that Omdia can further define the procurement factors contributing to U.S. public sector software monoculture and its implications. 

For any questions about the research itself or methodology, please contact: Matthew Short from Omdia at [email protected]

For questions about CCIA’s history and advocacy on tech competition issues or why it co-commissioned this study with Google, please contact Heather Greenfield [email protected].

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