The power of Microsoft's branding is so great that slapping the labels 'Live' and 'Office' on a piecemeal bundle of rehashed services seems to have the whole world agog. The evidence doesn't justify the excitement. Today's beta of Office Live is a repackaging of various web presence offerings that Microsoft previously tried (and largely failed) to market under the bcentral brand for a number of years.
Let's assume just for a second, though, that providing small businesses with an entry-level web presence really is a great platformMicrosoft will end up having to acquire from which to develop and launch the future of a new generation of web-native business productivity applications (I don't suppose it is, but hold that thought for just a few more seconds). Microsoft's problem is that it doesn't understand that delivering a service means a lot more than simply putting some software tools online; it means providing something that brings results. Microsoft should take a look at companies like WebSite Pros, who I wrote about last fall:
"Originally, it ... offer[ed] professional site building and hosting as an on-demand service. But in recent years, it has discovered that there's more money in providing on-going services that help small businesses generate leads through their websites. Its customer base didn't want a website just for the sake of having one; they wanted one that actually produced results."
In fact, it will be collaboration, not web presence, that sits at the heart of web-based business productivity applications. Microsoft at least seems to have an inkling of this, having included a rudimentary bundle called Office Live Collaboration in its beta. But it will take a very long gestation period indeed before that turns into anything like the kind of products that on-demand vendors already have out there in the market today.
Meanwhile, those other vendors are continuing to stride ahead, and as I've said before, Microsoft will end up having to acquire if it's going to have a chance of assimilating a services mindset and finally beginning to catch up. Good models to look at include WebEx WebOffice, which is based on the collaboration suite developed by on-demand pioneer intranets.com and benefits from over five years' experience of serving the small business marketplace. There are various Web 2.0 players too numerous to mention here but a good starting point would be Ishmael Ghalimi's blog about his experiments to use a mix of online services to establish an entirely web-based Office 2.0. And dare I say it, Google's latest moves with Gmail look like they might yet produce a far more fertile starting point than Microsoft's Office Live efforts.