Microsoft Office In The Cloud: The Strategy Behind It All
Back in 2008, Microsoft announced Office Web Applications – the web-based version of its ever-popular productivity suite – Microsoft Office. We’ve come across more details recently, with the beta release of Office 2010: the online suite will be made up of Word, Excel, PowerPoint, and OneNote, will be capable of synchronizing with the desktop, will be platform and browser-independent, but will contain less features than the desktop versions of those programs. That should not be an issue, however, since most Office users use very few features in Office.
The suite will be available to everyone for free via Windows Live and to corporate users through different distribution channels. Since the announcement, such questions as “How would this affect Google Docs/Apps and the Zoho office suite?” have been widely discussed topics. Let’s take a pragmatic look at what we should really expect from Office Web Applications.
Office Web Applications vs. Google Docs/Apps
Microsoft Office is the 800 pound gorilla in the room, with a market share somewhere between 80-90 percent in the productivity software space. Google has been hard at work chipping away at those numbers, although we don’t have exact market share figures.
From a product perspective, not many people know about Google Docs. Before you write your emails, I understand that tech fans the world over would disagree. The reality is, however, that the mainstream consumer has no idea Google is a whole lot more than a search engine. Whenever I do consulting work and introduce organizations to Google Apps, they are amazed that Google has such awesome services with its Apps/Docs. And here is where Microsoft has the upper hand: from a brand name recognition standpoint alone, consumers are much more familiar with Microsoft Office than they are with Google Docs. This can be attributed to a generational factor in perception: Office has simply been around longer and Microsoft has had more time than Google to let people know about it, as well as for the people to get to know (and use) Office. Google understands this and has recently begun aggressively advertising Google Apps – all in an attempt to convert a few more users to the product before the other leg of the 800 pound gorilla makes its landing (the general availability of Office Web Apps, of course).
In that regard, the Office brand name will carry over to Office Web Applications in being an instantly-recognizable player in the productivity software space, leading consumers to try it out at a rate that – in my opinion – will be higher than the adoption rate of Google Docs. This is a perfect example of leveraging the immense power of an already-existing product (Office on the desktop) and carrying it over to the web – a move that should be commended. At a time when everything seems to be moving to the web, Microsoft’s software plus services approach looks like a surefire method to fuse the social collaboration features of web apps with the full-featured functionality of desktop programs.
Unfortunately for Google Docs and Zoho, brand name familiarity will drive many current Microsoft Office users to try Microsoft’s Office web suite. Something tells me that if one percent of the enourmous Microsoft Office user base would sign up for Office Web Applications, that number would trump the amount of users Google Docs and Zoho have, combined. And that’s not taking into account that Office Web Apps will be available to anyone using a Hotmail/Live email account (which trumps the amount of Gmail accounts).
Office 2007 as well as Office 2010 users will feel right at home using Office Web Applications, since the web-based version of Office will employ the Ribbon UI that has come to define the desktop software package. After using Office 2007 and a beta version of Office 2010 on the desktop, the Ribbon is a far-superior interface element than traditional menu-based layouts. This is yet another reason for users to turn to Microsoft’s web-based solution instead of those by Google or Zoho.
Microsoft has announced that it will initially provide the web-based suite free of charge to all users via Windows Live (rather than Office Live, which is being discontinued and rolled into Windows Live). That falls in line with what the competition is doing: Google Docs and personal versions of Zoho apps are also free. For organizations that require more than 50 users, Google charges a per-user fee for Apps; Zoho charges for corporate use as well.
Companies will have the ability to use Office Web Applications in two ways:
- Host the Office Web Apps on-site
- Access a hosted version as part of their Microsoft Online Services (MOS) subscription
That’s a solid strategy for Microsoft that makes a clear split between home/non-corp users and corporations, similar to Google Docs and Google Apps. Will organizations pick the lower-priced Google Apps over the more expensive Microsoft hosted solution? Common sense says “yes.” But it still remains to be seen.
There is no question that Office Web Applications will prove to be a strong competitor to Google Docs, Google Apps, and Zoho apps. As such, Office Web Apps will compete for two markets – the home (non-corporate) user as well as the business (small, medium, enterprise). With a very well-known brand name that has come to define the world of productivity software, Microsoft is sure to lure many new users to its web-based version of the suite. And if Zoho and Google apply each apply their marketing prowess, they can ride off the coattails of Microsoft moving Office to the web.
One important question remains: what’s the long-term strategy of Office on the web? Will Microsoft eventually charge all users to use the product, introduce a “fremium” model, or use the web version to entice consumers to purchase the desktop version of the software? In the long term, this blogger thinks that it’s more likely to be the former rather than the latter.
Posted in Apps, Business, Decisions, Featured, Microsoft, Office, Software, Synchronization, Web apps