Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) Google is seeing increased demand for its G Suite of productivity software for businesses that competes against Microsoft's (NASDAQ:MSFT) Office and Office 365.
In March, G Suite had 6 million paying businesses, up from 5 million in February, Alphabet executive Javier Soletero told CNBC. The executive said G Suite is growing at an "incredibly healthy" and "surprising rate."
Soltero said Google Meet, its video conferencing and collaboration tool, which is part of G Suite, has 25 times more users than it did in January. In addition to Google Meet, G Suite includes Gmail, Google Docs, Google Drive and Google Calendar. G Suite is part of Google's cloud business, which generated $2.61 billion in revenue in the fourth quarter.
With employees around the globe working from home, schools shifting to e-learning, and cities around the world ordering shelter in place rules, demand for productivity and collaboration tools have been surging. For Google, seeing an uptick in its G Suite is welcome news giving its core advertising business, which makes up more than 80% of its revenue in 2019, is taking a huge hit as the COVID-19 pandemic continues to spread. While Google hasn't issued a warning like rivals Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR) about an advertising spending slowdown, the tech stock isn't expected to be immune.
Google isn't the only tech company seeing increased demand for its collaboration tools. Microsoft's Teams surpassed 44 million daily active users in March, which is more than double the 20 million it had at the end of November. Meanwhile, Zoom Video (NASDAQ:ZM), the popular video conferencing app, had 200 million daily active users as of March, up from a peak of 10 million at the end of December.
Editors' Note: An earlier version of this article incorrectly stated that G Suite had added one million users to its customer base. This has been updated to reflect that G Suite added one million companies.