RSSFree Office Web Apps: Brilliant ploy or desperate move?
By Scott M. Fulton, III | Published September 18, 2009, 12:15 PM
![Actor Toshiro Mifune in his brilliant portrayal of Admiral Isoruku Yamamoto, from the 1968 movie "Tora! Tora! Tora!"](http://images.betanews.com/media/3863.jpg "Actor Toshiro Mifune in his brilliant portrayal of Admiral Isoruku Yamamoto, from the 1968 movie "Tora! Tora! Tora!"")
The problem with sleeping giants in recent years is that "terrible resolve" hasn't necessarily gotten them very far. Of course, this applies outside the information technology industry as well. But not even the Internet -- the biggest revolutionary IT technology since the personal computer -- is creditable to any one major player or allied force. Historians will note that almost every company or group to attain success through the Internet did so either 1) completely by accident, and/or 2) without any substantive plan as to what to do with that success once it attained it.
But the last great "sleeping giant" episode in the history of the IT industry was one of absolute, intentional, and steadfast resolve. The landscape of our lives and work has been shaped by this chain of events. It was triggered by WordPerfect, and the terrible resolve was manifest in Microsoft Office. I watched from very close range as, within a span of mere months, the axis powers that commanded respect and even awe -- WordPerfect, Lotus 1-2-3, dBASE, and Harvard Graphics -- deflated to mere also-ran status. Their manufacturers, in an often comical display of poor timing and miscommunication, self-destructed.
As a result today, when you ask businesses worldwide why they use Microsoft Office, the majority of responses you'll get say it's because it's the productivity suite for Windows. And when you ask those same businesses why they use Windows, the answer is because it's the operating system that runs Office.
The first absolute sign that the shockwaves from that 1986 turn of events were at last subsiding, came yesterday. Microsoft announced that Office Web Apps -- which will convey the essence of the productivity tools used by tens of millions of customers today -- will be hosted from its servers for free. A tremendous chunk of the company's revenue, and one of the pillars of its highly successful business plan, is being sacrificed. Office 2010 will continue to be sold, and new business revenue models will be constructed for hosting Office Web Apps. But a major chunk of a business that provides Microsoft with $16 billion in annual revenue, is being chucked in an effort to retain the strength of the brand, and recover lost ground for another business that has never seen that much revenue in its history, and may never hope to.
What triggered this move is obvious: Google attacked Microsoft's home turf, and with a Web applications suite whose quality makes Novell's final WordPerfect for Windows seem downright satisfactory. There's considerable wisdom in the argument that Google did this not so much to attain power in the applications segment, as to make Microsoft devote resources to defending its power base, which would divert resources away from its efforts to build a competitive online advertising revenue structure. Tying Chrome OS to Google Apps would create a two-pillar revenue structure similar to how Windows and Office are intertwined -- a formation which in and of itself must have made Steve Ballmer's skin crawl.
It seems like a logical enough theory until you realize that Microsoft's most strategically plausible retort, thanks to the curious geography of the IT industry, runs right through Google's home turf: To defend Office as a brand, Microsoft must make Windows Live more powerful. The only way to amplify Office is through the Internet; and right now, the only company with the resources and wherewithal to turn Google into the Ashton-Tate of 2012 is Microsoft.
Yesterday's move by Microsoft was a total surprise, including to me. This is not because I had predicted that Microsoft would only make Office Web Apps available to paying Office 2010 customers, and I was wrong. This is because I was explicitly told by Microsoft's people that it would only make Office Web Apps available to paying Office 2010 customers, and they were wrong. Make no mistake about it, yesterday's decision was a change of course.
Should Microsoft's bold act of self-defense be successful, Office Web Apps could become the leading center of productivity resources on the Web. Office Web Apps could be tied to Windows Live the way Office is tied to Windows. And that will mean more subscribers to Microsoft's cloud storage services, and that the company can build a center of online activity around Office Web -- something like what MSN has always tried to be, except without having to live with the dark stain of being MSN.
But what would have been gained through all of this, and what will have been lost in the process? If you ask consumers why they use Windows, the reason you'll get most often is this: It's the operating system that came with their PC. The two reasons they chose that PC were to get on the Internet, and to use Office (Word/Excel/PowerPoint). As of 2010, neither of those reasons for choosing the PC will absolutely necessitate buying Windows, which leaves only the fact that OEMs choose Windows.
In a world whose functionality is delivered online, will there be a need for Windows, the monolithic operating system whose Registry is designed to record the state and specifications for thousands of applications installed on hard drives? My answer is a mostly technical one: Yes, there will, because something needs to be capable of providing an homogeneous platform in a PC industry with infinite combinations of hardware. That's what OEMs want, and that's what Microsoft will very likely continue to deliver. When Google says the Web is the platform, it means the haphazard collection of planks, nails, and duct tape on which it's currently dancing; it's the hardware platform that keeps the IT industry moving, and right now, it's Microsoft that's greasing the gears and fueling the drivetrain. Google really wouldn't want to trade places.
Microsoft's role as the principal provider of the interoperability platform for computing devices is probably safe and secure for at least the next five years. It's knowing this that makes me wonder whether the company really needed to sacrifice one, if not two, of its consumer revenue channels, just to ensure that Google Apps -- which really is for productivity what the Ritz Brothers were for comedy -- doesn't gain a toehold in a market no one is really certain it even needs. Maybe the sleeping giant has been awakened, but its actions -- at least at present -- lack the signature of resolve that we've seen once before, so terribly and so brilliantly.
hmm... great going keep it up.. thanks for this information...
http://www.i-netsolution.com
Score: 0
|people will pay for the convenience of having their apps installed locally on a computer.
also, it is doubtful that all the features that make a locally installed app rebust can be provided via online.
further, using apps online is likely not secured. there is likely a shadow copy preserved on the servers which can be beneficial (like for copyright protection) or detrimental (like for law enforcement).
personally, i would like to see an intelligent contact listing via the online apps for emailing documents where as i can send any letter at any time to any email address, like those to congress, ambassadors, heads of ceo's, customer services, etc.....
but i don't think bing is up to such a challenge of spidering email address to populate an online contact listing.
there was a time however, that look up for email address's was possible. who knows why this has subsided into time.
Score: -1
|Microsoft ain't that dumb. They are NOT gonna give you much more features than Google Docs. They'll design the feature-base in such a way that they dominate Google in the online apps arena, but still there will be plenty of incentive to buy full Office..due to hundreds of "only in desktop version" features. Kinda like the reasons they've been giving users to upgrade the superb Office XP to even more fabulous Office 2003 and then to what?-can-still-get-better?- Office 2007 and then to...
Or, of course, you're gonna get a Lite and Pro version of the web based apps, whereby if you paid the subscription on the Pro version, they'll make just as much profit (or more) compared to if you shelled out the cash up front with the desktop suite.
And let's not forget Google Adwords ripoff rates. As a small biz we spend thousands of bucks a month, so I can imagine that if the average person clicked on one little ad a day (that he sees in his MS Live whatever) then theoretically MS can make infinitely more money on the online office, making it THE biggest cash cow for the company, and hence, the most feature full..within a few short years.
All in all, Google is in deep s***. MS can afford to "gamble around" on things. One bad move by Google, and it's gonna be their last one...
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|Disregard.. this was supposed to be a reply to another comment, not a new one..
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|"As a result today, when you ask businesses worldwide why they use Microsoft Office, the majority of responses you'll get say it's because it's the productivity suite for Windows. And when you ask those same businesses why they use Windows, the answer is because it's the operating system that runs Office."
This shows a complete lack of understanding of why business runs Windows. There is no other OS and Server topology and management structure that provides even close to the same level of features and functionality.
IT people run Windows and Windows Server for integration and management features, not because of productivity software that runs on Windows.
In all the we hate M$ speech, people really do lose sight of the bigger picture and why Windows and Windows Server succeeds in corporate and business markets.
Go ask any of the top 50 companies why they use Windows Server and Windows clients, you will find MS Office has nothing to do with it.
In this argument there is also a large misconception of security and why Windows Server is chosen to handle high profile and high security open network access and web sites.
Take American Express as a good example of a company that specifically chooses Windows Server with IIS for all its public access points.
Here is one example why...
Windows Server 2003 IIS has had 8 vulnerbilties since it was released, and only 2 were even moderate. Now contrast that with Apache in the same time frame that had 26 vulnerbilities with several being critical and even giving remote root access to the servers.
The whole circular MS Office to MS Windows argument is just wrong, and anyone that has worked in an IT department managing more than 10 clients should know the reasons why the Windows and Windows Server environments are easier and offer a significant number of features and integration that just does not exist elsewhere.
Score: -1
|Actually you miss another big reason people run Windows/Office: Support for the product far longer than any other competing vendor, at far, far less cost, in many cases free.
Name another vendor that supports its OS 10-12 years after release, for free. Name an Office application with 8 years of support other than Microsoft Office?
Score: -1
|The problem, I believe, is *who* was asked... ask any office personnel and you'd likely get the answers in the article. Ask Management, and you'd likely get the same.
"Go ask any of the top 50 companies"
...just make sure you're talking to the right people. ;)
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|Anthony, I'm afraid I can't agree with you here. If I have a "complete lack of understanding" of the reasons businesses run Windows, then all the people with whom I deal every day on this planet in which we live, must suffer from the same collective lack of understanding. A majority of us must be delusional. I'm sorry, we're just not.
What I do agree with you on, though, is the fact that no other topology provides the same depth of features. That's absolutely true. But when I ask the people who write the checks why they made the decisions they made, that's not the reason. It's because they want to run Office.
Second, where the hell did you get this idea that I hate M$? Why do some folks keep putting these words and ideas and thoughts in their heads as if they came out of my mouth...and then call _me_ the one with the complete lack of understanding?
-SF "Earth" 3
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|" But when I ask the people who write the checks why they made the decisions they made, that's not the reason. It's because they want to run Office.
"
Perhaps that is the problem? Ask the people who make the decisions, not those writing the checks.
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|That was always the plan, free for Windows Live (end users), paid for business users. Have you been living under a rock? Or trying to sensationalize a "normal" news piece? Office Web Apps were forever going to be free ever since they were announced. They never said they'd charge end users for web apps. Sloppy reporting really.
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|I don't think that's the point that was being made. I think the point was that the availability of the web apps were originally going to be free ONLY to those who purchase the desktop software suite. The shock is that they made it free to everyone that has a windows live account, using skydrive as file storage.
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|Nope they were always going to be free because MS originally said even Linux users could use them (there's no MS Office on Linux).
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|You might be overestimating the amount of revenue lost. That might lose money in the consumer market, but I don't see them losing that much in business sector.
People will need a copy of Office on their computer for when they are traveling. I doubt the government is going to all of a sudden switch over to a web-based productivity suite. The government likes to create its own standard image and a web-based version takes that possibility away.
I don't see this as a huge revenue lost for Microsoft. What it does do is take market share away from Google. Who would use Google docs when you can use Office? Also, it has the potential to draw people away from some of the free office suites to Office and eventually convince them that they should spent the money for Office instead of using a program like Open Office. They did this because its about their bottom line and this may actually improve their cash stream.
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|"People will need a copy of Office on their computer for when they are traveling."
This is currently under development.
" I doubt the government is going to all of a sudden switch over to a web-based productivity suite. "
Several governments run under alternative productivity suites. Entire school systems run under google apps.
"The government likes to create its own standard image and a web-based version takes that possibility away."
Web based versions *all* have controls for administrators to freeze version features/upgrades from changing. Any vendor not providing this wouldn't be considered, of course.
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|"Microsoft's role as the principal provider of the interoperability platform for computing devices"
Huh? Guess you don't work in the IT industry. Microsoft does nothing to provide interoperability with anything besides their proprietary software and proprietary devices. Having spent the past 15 or so years doing IT work, i can tell you my job is painful any time i have to inter-operate with the proprietary Microsoft world and their proprietary extensions to every API/Protocol ever created.
Score: -8
|"Yesterday's move by Microsoft was a total surprise, including to me."
You got that right. I was absolutely stunned.
The game has definitely changed. No idea how it will play out. In my opinion, Google is going to need to do some serious overhauling of their apps if they want to stay relevant in that area. Hopefully...they will. I would love to see this area explode in terms of features, functionality, and speed.
...and who says the files need to be in their cloud? Why can't the apps save to the PC? Or to your corporate cloud? (...or to your personal cloud?) I would lvoe to see more customizability built into these apps for saving to alternate data-stores.
Score: 3
|Wouldn't mind seeing the development tools go this direction as well, or at least an option of running a version of some of their development tools in this manner.
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|I'm not so sure why you were all "stunned" yesterday. They hinted to this last year -and- they *announced* this in the Summer (June?).
All they did this week was let people see and use them through their preview or beta (or whatver they call it)
Score: -1
|"I'm not so sure why you were all "stunned" yesterday. They hinted to this last year -and- they *announced* this in the Summer (June?)."
What they announced was Web Apps for Office 2010. No-one knew they were going to be releasing separately from Office 2010...apparently not even them.
So check your indignation and superiority before posting like you know it all next time. You apparently don't.
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|I think the ones that want the customizability will need to purchase the web app suite to host and configure on corporate servers. That would be especially true if they want to protect proprietary data.
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