One Office Suite please. Hold the mayo (I brought my own)

Last week was a very busy week in the discussion threads at ZDNet with some of the most vibrant debates encircling the issue of bloat in shrink-wrapped software: a debate that was touched off by my coverage of Google CEO Eric Schmidt's insinuation that Google Apps doesn't compete with Microsoft Office.

Last week was a very busy week in the discussion threads at ZDNet with some of the most vibrant debates encircling the issue of bloat in shrink-wrapped software: a debate that was touched off by my coverage of Google CEO Eric Schmidt's insinuation that Google Apps doesn't compete with Microsoft Office. Whereas Google Apps (the special, domain-based bundle of Web-based applications that Google offers to organizations) can probably be described in its entirety on a sheet of paper towel (OK, in a very small font), Microsoft Office's feature list would take up an entire roll. In that context, one is not the competitor to the other. It'd be like saying a small Kia (a perfectly good automobile) competes against a Land Rover.

But does most of the market need the entire roll? Or will just a sheet do for most users? Both the Kia and the Land Rover qualify as transportation. It's the old 10/90 question. Looking at today's office suites (and not just Microsoft Office), could 10 percent of the features satisfy 90 percent of the market? 5/95? 15/85? It's hard to know. In ZDNet's threads, several readers argue that it may indeed be the 10/90 rule, but it could be a different 10 percent for every person which is why companies like Microsoft must deliver such full-featured suites to the market. My fellow blogger George Ou likens the situation to shoppers and grocery stores. The store has everything. But no shopper leaves with it all nor do any of the shoppers leave with the same items. In the end, George asks what's the big deal if you get more than you really need? It's no skin off his nose.

Cost and value play a big role if ask me. There are all sorts of costs (not just the acquisition cost) associated with the use, maintenance, and support of software and they factor into the overall value that users and organizations can expect. It's not as simple as saying the extra 900 features are fine to have around, even if you don't use them. I posit that those 900 features hit the bottom line one way or another. It costs the developer money to put them in the software and those costs have to be recovered. If 900 unused features bury the 100 that get used, there are costs associated with that too.

The more features there are, the more that can go wrong and its hard to put a dollar number on the cost of things going wrong. A good example for me is mailing label printing. I use it to print badges for events (from a printing perspective, there's no difference between mailing labels and badges). But despite being told what I see on the display is what I'll get from the printer, I've found that this simply isn't the case. Even after following all the directions to the "T." As a result, I've found myself at event check-in tables wrestling with my badge printing setup until the point that I simply get out the magic marker (only after wasting pages of Avery badge stock). Can you put a price on that? Meanwhile, I'm told that software that does nothing but badgeprinting/labelmaking exists and that it's much better and more reliable than what's found in office suites.

ZDNet reader TonyMcS' comment inspired me to make some different points about the bloat issue. Tony wrote:

This is often bandied around and may be correct. The problem is that people are not using the same 10%. Any attempt to reduce the features to some mythical average 10% usage is still going to alienate most of the potential market as it will leave out at least one feature that some users will find critical. Once again reminiscent of physicists being enlisted to solve an egg-laying problem and start with "let's assume a spherical chicken". Office has so many features because a lot of people use them - the grocery store is quite a good analogy.

Going back to the value equation, the question isn't as simple as whether or not Google, Zoho, Thinkfree, or some other hosted apps provider will settle in on a fixed and slimmed down feature set at a cut rate like the $50 charge that Google plans to assess users of its Premier Edition of Google Apps (gets you 24/7 phone support, amongst other things). From Microsoft's own monitoring of millions of Office commands used in the field, Microsoft didn't reduce the total number of features. In Office 2007, Microsoft looked to make it easier to get at the most important ones. But one size can't fit all and for some number of users, the default user interface and the subset of features that rise to the top will be perfect. But for others, it will not. In other words, some subset of users must either customize the user interface (some of this is automatic) to their liking or dig through some amount of feature clutter to get at what they use most.

More importantly though is that, judging by these actions, even Microsoft agrees that one size doesn't fit all. At least in terms of what users see. The only question then is how should a solution provider address the diverse needs of a given marketplace? Should it go the route of full-bodied shrink-wrapped software knowing full well that not everyone uses everything and that delivering such a package could involve unwanted, complexity-related expense as well as additional acquisition expense? A new, legitimate copy of Microsoft Office for example can run you $400-$500 and involves a per incident support cost of $49. Even Corel's Wordperfect Office X3 Pro retails for $350.

Critics like Ou argue that the cost is worth it, even if you end up using only a fraction of the features. They're also quick to cut offerings like Google Apps down to size because they simply aren't robust enough to satisfy the market's broad range of needs. But in so doing, they fail to acknowledge the ecosystem part of the on-demand model that Google is taking (and that companies like Salesforce.com have successfully pioneered), and the advantages that go with it. Both offerings (Google Apps and Salesforce) strike at the heart of their target markets with the core functionality that everyone in those markets needs. But beyond the core, both are fostering ecosystems of third parties to take care of the remaining functionality.

For example, Salesforce.com is lousy when it comes mass e-mailing existing customers. In its core functionality, the company has made a conscious decision to include only very limited mass e-mail capabilities since not everyone needs them. But for those who do, there are a variety of solution providers whose solutions snap into Salesforce.com as though they're a part of the application (see image below) continued below...

(....continued from above) Two of the leading mass e-mail providers that seamlessly snap into Salesforce.com are ExactTarget.com and VerticalResponse.com (see my coverage of Vertical Response here). In other words, just because Salesforce.com doesn't offer mass e-mail as a part of its core functionality doesn't mean that its not available. It also doesn't mean that it's not available in an integrated fashion. Not only is it available in an integrated fashion, it's available in an a la carte fashion from a variety of solution providers who are competing for the hearts and minds of Salesforce.com users with what they consider to be best of breed mass e-mail solutions. Not only do Exact Target and Vertical Response compete on the grounds that software companies typically compete on (functionality, usability, versatility, etc.), they compete on pricing models as well. For example, with Vertical Response, in true on-demand fashion, you pay by the number of e-mails.

Going back to my badge-printing difficulties, I can definitely imagine paying less for a scaled back productivity suite that, instead of offering mediocre functionality, provides a way for me to snap in a best of breed solution from a range of providers who are competing for my business. Not only does that competition fuel innovation and quality, it keeps the price for that functionality down. In turn, this means that when I puzzle-piece together a range of software services into some final configuration, whatever I end up with in that final package is only what I need, and that's what I'm paying for. Nothing more. Nothing less. 

As on-demand ecosystems go, Salesforce.com's AppExchange is probably the most flush with third-party solutions (many are actually free) and the while the fundamentals between Salesforce.com and Google Apps are primarily the same (core functionality + a la carte third party components = a suite tailored to your needs) there are some differences. With Salesforce.com, you pay for the core functionality no matter what (and there are different packages). With Google, the core functionality is free. So, for organizations that need nothing but that core functionality -- collaborative (or single-user) documents, spreadsheets, e-mail, calendaring, chat, and rudimentary Web hosting (by the way, all at yourdomainname.com) -- Google Apps is currently an extraordinary value for the price: free. I say currently because who knows what directions and changes Google will bring to Google Apps over the years.

If I had to guess, the free suite is likely to get better over time. For example, as a result of Google's recent acquisition of  PowerPoint-like presentation functionality (via acquisition of Tonic Systems), it's hard to imagine presentation functionality not being a part of the free package. Although Google Apps is currently the same bundle for everyone who signs up, Google is stratifying the market a bit by using language like Google Apps for Families (subscribed!). If you ask me, it's a signal that different core functionality is coming for different markets. For example, whereas the version for businesses might offer Virtual Private Intranet-style blogging (basically, a behind-the-virtual-firewall version of Google's Blogger) that can use Google Docs as its authoring front-end, perhaps the version for families will offer public blogging (again, at yourdomain.com) and tighter intergration with the Google services that might matter to families like Picasa (Google's photo sharing and editing service). Based on the complete palette of Google's services, it's not hard to imagine a bunch of other vertically organized bundles, nor the third-party provider ecosystems that each could cultivate.

My point in bringing all this up is that it's a mistake to judge Google Apps by what's there today (even though what's there today is a very functional and extraordinary deal, even for 50 bucks). Tomorrow's functionality is likely to be far more robust than it is today. It's just a matter of herding the right cats at Google and the more cats Google herds into Google Apps, the more compelling free is going to be. Likewise, Google's version of AppExchange -- currently divided into five categories: Admin, Calendar, Start Page, Professional Services, Other Solutions -- is in an embryonic state. It's no AppExchange yet. But it will get there. Not only does Google have the brand recognition that developers look for (as the brand draws users in, developers looking to market their wares to those users will follow) the platform has legs because of who's behind it.

Microsoft is entirely familiar with this model. No operating system ever succeeded without the involvement of third party developers. Windows is probably the most shining example of this principle. Microsoft Office even has an ecosystem of its own (there are a great many third party add-ons to Microsoft Office). Do the pricing, on-demand nature, and maturity of the Google Apps ecosystem mean that we can expect a tipping point at which we start chalking off alternatives like Microsoft Office or Corel's Wordperfect Office? No. With very major market traction usually comes an equal and opposite reaction. If the Google Apps approach gets any traction, the existing incumbents will simply respond in kind on price, function, and architecture. My guess is that Google will get such traction for Google Apps, the competition will respond, and ultimately that will be good news for people like us who expect real value from our solution providers. Without the clutter.

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