Is the Web Office Microsoft's game to win or lose?

Is the Web Office Microsoft's game to win or lose?

Summary: In the wake of all the noise generated by the release of Google Calendar last week, I added a comment to a post by fellow ZDNet blogger Richard MacManus about Google Calendar suggesting that Google wasn't about to "kill" anything. Richard's reply got me thinking: who really has the best shot at winning the Web Office game?

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TOPICS: Microsoft
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In the wake of all the noise generated by the release of Google Calendar last week, I added a comment to a post by fellow ZDNet blogger Richard MacManus about Google Calendar suggesting that Google wasn't about to "kill" anything. Richard's reply got me thinking: who really has the best shot at winning the Web Office game?

Here's the comment I posted in response to Richard's reply:

"The migration to a web office will be slow and possibly never complete for many. So Microsoft, with their entrenched base, is actually in the best position to leverage that base as they migrate key functionality from the fat clients we use today to the lightweight web tools that are today in the chipped flint state of technical evolution.

Google will be a viable alternative for the ABM crowd and Mac and *NIX folk and will hopefully be to the web office space what Firefox is to the browser space - a serious competitor that keeps Microsoft from getting lazy and complacent (again).

Nothing in Microsoft's long history of market dominance suggest they will sit idly by and allow one of their major revenue streams to be diverted. And from the long view, their response to web-based software and services has been much faster and more concerted than their previous epiphanies that the world had changed while they counted their treasure. Call it the Ray Ozzie/Gary Flake effect."

Doesn't that make sense? If you accept it as a given that Microsoft currently owns the market for productivity suites on the Windows platform (and I hope you brought enough mind-altering substance to share with everyone if you don't), then aren't they in the best position to extend that advantage onto the web by transitioning Office into a service without relinquishing the advantages of a PC-based client?

One of the biggest complaints I hear about Office is that it is too expensive. Suppose Microsoft were to create a new "light" version of Office that provided a core set of features in both an online and a PC-based incarnation. Further suppose that part of this dualism was the ability to instantly publish any document to a shared, collaborative online space with synchronization back to your desktop. This web-enhanced Office Light could be sold at a nominal price or given away with a subscription to the online service. Given their existing assets in collaboration in the form of SharePoint and Groove (not to mention Exchange Server), how difficult would this really be?

Another complaint about Office is that it's bloated - that the average user only touches a fraction of the total functionality. A light, but fully file-compatible version that was differentiated not only by a reduced price, feature set, and desktop footprint, but also by its ability to connect to a web-based counterpart integrated with a collaboration environment would be a killer app for many people.

The current Office Live initiative was criticized by a lot of people for not being a web-based version of the current suite. I'm the first to admit Microsoft makes some awfully curious decisions when it comes to naming products. The whole Internet Explorer/Windows Explorer and Outlook Express/Outlook confusion are classic cases in point. But what if Office Live, in its current form, is just the first stage in establishing the infrastructure for an application play like the one I'm describing?

I think it would work. And I think it would be an incredibly tough act to compete with. For Google, or anyone else. What do you think? 

Topic: Microsoft

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5 comments
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  • JUST DO IT!

    The first to do it will probably be the winner.
    jason.mailley
  • It's about the next generation of knowledge worker

    Hi Marc,

    I see what you're getting at, but I have to say that I'm not nearly as confident that Microsoft will be able to dominate the productivity software space for much longer.

    For example, I'm a Pocket PC user - I love the thing! But recently I've been using Gmail for my personal email because my experience with it is that it's faster and more stable than Outlook, and supports my work flow better. With the advent of Google Calendar, I've moved my scheduling online too. I've been using BackPack for my task lists for some time as well.

    So, although I've got a PDA, I'm not using it for its primary purpose anymore because of my love/hate relationship with Outlook that has become a hate/hate one. Okay, maybe I'm a unique case.

    But my highschool aged brother-in-law isn't. For his generation (dare we call it the myspace generation?), free tools are where it's at, and they feel perfectly comfortable keeping their entire lives online. As they move into the workforce in large numbers, this philosophy will follow, just as IM came into the workforce as my generation moved in.

    Google is ahead of the game in terms of web-based productivity software, what with Gmail, Google Calendar, and Writely, and there's no reason to think they can't maintain this lead. Microsoft won't be able to stomach giving away Office-like functionality for free, whereas Google can fund it via ads.

    I don't think Microsoft has a chance.
    Jason Clarke
    • Guess who the next generation works for?

      Jason - utopian though your vision is, it's not firmly rooted in reality. You say:

      "But my high school aged brother-in-law isn't. For his generation (dare we call it the myspace generation?), free tools are where it's at, and they feel perfectly comfortable keeping their entire lives online. As they move into the workforce in large numbers, this philosophy will follow, just as IM came into the workforce as my generation moved in."

      What your high school-aged kid brother does with his personal information and what his employer is likely to allow him to do with confidential and proprietary company information are two entirely different things. No business that values it relationship with its customers is going to leave its confidential information on a free service secured by a simple to crack encrypted password.

      New employees can influence the direction companies take but they do not set policy. Instant messaging, your other argument, is an ancillary service that "snuck" into business over many years and didn't really replace anything. It's completely different from the core tools used by knowledge workers.

      Also, I never suggested Microsoft would "give away" anything. You're right - they're not wired that way. But what I described is a viable way for them to sell a core set of functionality, enhanced by an online component - either at a reduced price compared to the full-blown suite or as part of a subscription model. There's a revenue component in either approach.

      Finally, as to your personal comfort level with having all of your stuff online - that's a personal choice and one you;re fortunate to be in a position to make. You'd be in direct violation of procedure and policy at most decent-sized companies (forget about larger corporations) if you did that with their data.

      I use Gmail (as you know) and have since it was first introduced. It's the best web mail yet. But comparing it to Outlook is crazy. Google Calendar doesn't have any integration with Gmail and BackPack? It integrates with neither.

      I'm not sure what your PocketPC has to do with any of this. Are you unhappy with Pocket Outlook (or whatever they call it these days)? I'm sure there are plenty of other apps you could use on your PDA. Personally, I use a Pam Treo and KeySuite.

      Using three separate online applications may work for you but I prefer the integration of all of my personal information (including e-mail) into a single environment that I can access at any time - whether I'm online or not. There are still plenty of times and places where connecting to the net is either impossible or inappropriate.
      morchant
  • Microsoft's dilemma

    "One of the biggest complaints I hear about Office is that it is too expensive. Suppose Microsoft were to create a new "light" version of Office that provided a core set of features in both an online and a PC-based incarnation."

    The problem with that idea is that a significant proportion of Microsoft's present Office customers would drop Office in favor of the cheaper solution, and Microsoft's profits would drop.

    That is Microsoft's problem. The web has come up with a new way to handle office computing that is in some (not all) ways better and also is much cheaper. If Microsoft follows the new trend it loses revenue, if it doesn' then it gets left behind.
    Eduardo_z
    • But they're losing th revenue anyway...

      While Office is (and will continue to be) a cash cow for MS, they're already "losing" massive revenue from the roughly 50% of their installed base that hasn't even upgraded to Office 2003 yet.

      I don't think your argument reflects the core markets that represent new Office sales. The consumer market is already buying a cheap version of Office (Student & Teacher) so there's no loss there. Enterprise organizations execute volume licensing agreements that reduce the cost per license to a very low unit cost.

      Another big source of Office revenue is in new license sales to small and medium businesses who buy their licenses through an OEM like Dell with their new PCs. And upgraders (who, as I said, have not been exactly beating a path to Microsoft's door for Office 2003).

      With the kind of defined and controlled channel strategy Microsoft has established, I think it's big mistake to assume that an offering like the one I'm describing would: a) be made available through all channels; b) would be of interest to all customers; and c) would necessarily be sold in a way that it would cannibalize anything.
      morchant