Is Microsoft Office Threatened by Google Apps?
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You'd certainly think so, based on some of the features in the upcoming Office 2010. By making a stripped-down version of the productivity suite available via the cloud, and free to Microsoft Live subscribers, Microsoft seemed to be taking Google Apps head-on. To keep the enterprise happy, they also plan on offering Office 2010 as a hosted subscription service and an on-premises platform; a large institution, after all, might like the savings that come with running a platform from the cloud, but no way they're letting their proprietary information flit off into the ether. Then Google, deciding it wanted a larger slice of the SMB (small-to-medium business) and enterprise market, stripped the "beta" from platforms such as Gmail, in order to hint to procurement managers and IT administrators that their products were stable enough for business use. They followed that up, this week, with billboard ads that exclaim the virtues of Google Apps in an office context. Set to run in four major U.S. cities, the billboards will change every weekday for a month, displaying a new message each time about the virtues of "going Google." As with anything Google, this billboard announcement has generated news. But how much of a threat does Google Apps represent to Microsoft Office within the enterprise? Not much, apparently. But that's not a comment on the abilities of either Microsoft or Google to deliver a cloud-based productivity platform; rather, it's the trust issue that many businesses seem to have with the cloud itself. "The public cloud is perfect for certain things but maybe not for business," Rob Enderle, an analyst with the Enderle Group, told me in an interview a few weeks ago. "It's not something you should build your business on, particularly if your revenue is based on being able to stay in contact with people." "With the private cloud, you can assure the quality of the experience," he added. "Google Apps is definitely maturing; you'd be more comfortable with it in a small business setting and not an enterprise setting. When you have an outage, it can get to significant levels of damage pretty quickly, so your tolerances are tight." If you're Big Bob's House O' Fishing Equipment (and BBQ Ribs), trusting your data and e-mail to Google Apps may not be a bad decision, especially considering the cost-savings; and with regard to reliability, even a few hours' downtime probably won't affect your fishing-lure sales. But if you're Merrill Lynch entrusting your proprietary information to the cloud, while keeping your fingers crossed that said cloud won't choose the absolute wrong moment to go down, may be a bridge too far - at least at this point in the cloud's evolution. Case in point: Every time that Gmail and Google Apps experiences downtime, there's always a rush of people declaring that cloud-based applications aren't quite ready for prime-time in an enterprise context, and that the cloud-as-a-concept needs to mature a bit before larger companies begin embracing it in larger numbers. By offering Office 2010 as a hosted subscription service, or on-premises platform, Microsoft attempts to turn many of the complaints about Google Apps to its advantage (although on a site linked to its new ad campaign, Google tries to address many of the issues that people have with cloud-based platforms' security and accessibility). More to the point, Microsoft's business division is a major money-maker for the company, and offering an expanded, non-cloud-based version of Office 2010 allows the income to keep rolling in - something that Microsoft needs, considering that the company's most recent quarterly revenues dropped 17 percent year-over-year. Microsoft, in other words, probably doesn't have a serious threat to its Office franchise quite yet. But Office 2010 shows its thinking long and hard about the future. |
Comments (6)
er... "When you have an outage, it can get to significant levels of damage pretty quickly, so your tolerances are tight"
Well I have had more outages using MSFT Exchange than I have ever had using gmail! I cannot recall a time in the 5 years of having a gmail account where I couldn't send an email!
In this ecomonic downturn there are many businesses looking at ways to reduce spending.
all those Microsoft Client Access Licenses? All those servers in your data center? All that IT staff?
I think Prime time is here- and in a lot of cases its about corporate survival! If you can't address the top line what do you suggest?
It's not all about a red pencil through your personnel- how will that help when the economy picks back up? Now 3 years on a cloud based service until Microsoft product settles down (new operating system, new servers in Wave 14 etc.) I think thats smart business.
Posted by Tom Buntu | August 4, 2009 6:26 AM
Hmmm, let see if I get this right: MS tells us the cloud is the future, Google offers apps based on the cloud, but they're not to be trusted.
So, is the cloud good or is it bad?
Seems the cloud is a cloud regardless of whom host it. All those server farms look pretty much the same don't you know?
Posted by just a drone | August 4, 2009 10:01 AM
"....Well I have had more outages using MSFT Exchange than I have ever had using gmail!..."
It's time to fire your Exchange Administrator...
Posted by evan2k | August 4, 2009 12:08 PM
When you say Microsoft Live are you talking about Microsoft Office Live, Windows Live or what? I'm assuming Office Live but you don't specify, remember Microsoft has differnet "Live" sites that use that as part of the name. Is there a cost for "Microsoft Live"?
Posted by Brent | August 4, 2009 1:03 PM
Quite frankly I think the downtime aspect is the poorest argument you can make against grid/clustered (cloud) computing. I mean, that's exactly its strength. What I think should worry businesses, especially large ones, is access to and control of your data. Who has access to it? Who really owns it? Who can *demand* access to it? (If you're an international business, just because a US court can order access to data in a US case, doesn't mean you'd want it to access properties of a foreign subsidiary - in fact that subsidiaries' country laws might explicitly forbid some data to be available to other locations, etc).
IMO, these are the essential and yet unaddressed questions.
Posted by TomasF | August 5, 2009 6:01 AM
Nick's article is titled: "Is Microsoft Office Threatened by Google Apps?"
One Word, YES. Is the cash cow MS Office going die overnight, NO. But it is bringing in less money these last two quarters.
Google Apps, or Docs, is designed to go after Businesses and Government agencies. As such, it is going to take away some of MS money, and already has. It cheaper than Office, and does what most will need. Just a guess, but Google Apps are most likely going be a part of the new Google Chrome OS, and that could be an even bigger threat.
Nick, there is a bigger ongoing threat to MS Office, one that your predecessor who not ever write about or use its name. Nick its called OPENOFFICE, its a free office suite very much like MS OFFICE. www.openoffice.org download and try it and use it for free.
Most GNU/Linux distro's come with a free office suite or word processer. OpenOffice, KOffice, or Abiword, as the usual ones. Abiword and OpenOffice also have Windows ports for download as well. abisource.com
All these programs are making inroads against MS Office. MS Office is too expensive. But the competition is responsible for driving down the price of MS Office. It would seem that this cash cow is under attack not just from Google, in fact Google, thus far, is not MS Office main competition. OpenOffice is.
Nick, I hope unlike Joe, that you will not be afraid of using the "OpenOffice" word. That would be refreshing change.
Posted by Chips B Malroy | August 5, 2009 6:08 PM