R.I.P.: The Web 2.0 Office Suite
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For all the hubbub about Web-based alternatives to Microsoft Office, surely someone is using them. Uh-oh, surely not. |
In a recent survey, NPD asked nearly 600 PC users: "Have you heard about online, browser-based office productivity applications like Google Docs, Google Spreadsheets, gOffice, etc.?" NPD also asked, "If so, how often do you use them?"
Ninety-four percent of U.S. consumers have never tried a Web-based productivity suite alternatives. A mere 0.5 percent have substituted Web-based productivity suites for desktop software such as Microsoft Office. Chris Swenson, NPD's director of Software Industry Analysis, described the 0.5 percent figure as being a "bit high." Swenson predicted worldwide usage to be even lower than the United States.
The scant adoption makes some sense of Microsoft's Office Live Workspace, which went into broad beta last week. The service clearly is designed to be an adjunct to Office desktop software rather than a Web-based alternative. If NPD's numbers are indicative of real-world usage, Microsoft hasn't much to worry from Google Docs and Spreadsheets or other online alternatives. Maybe too many people make too much about the Web 2.0 threat to Office.
"The survey results show not only that SAAS [Software as a Service] firms have a long way to go to build brand awareness and trust among PC users. but it points to how powerful the Office brand still is, and how difficult it will probably be for most of these firms to dislodge huge swaths of Office users from the grips of Microsoft," Swenson said.
Google Docs and Spreadsheets perhaps is the most visible of the Web-based Office alternatives. But usage is still nascent. "My estimate is 840 million PCs-in-use by the end of 2007—that's about 0.18 percent of PCs," Swenson said.
While online Office alternatives may not be the thing, other software-as-a-service categories are doing just fine, thank you. Online tax preparation is an example of one successful SAAS category, Swenson said. Successful SAAS products typically share a common trait: People pay for them. Most online Office alternatives are free, at least for consumers.
Another successful SAAS offering is surprising at first glance. Through the end of September, Apple's .Mac was the second-ranked Mac OS-only software SKU, at U.S. retail, behind Office 2004 Student and Teacher Edition, according to NPD. While .Mac is an online suite of services, Apple sells a license number in a box at retail.
"Because the physical box exists, Apple retail staff can put it on top of the MacBook someone's buying," Swenson said. The service costs $99 a year, but Apple chops $30 off the price when purchased with a new Mac. "The Apple Genius can sell .Mac to someone who's had a hard-drive failure, and, of course, someone could wander in off the street, discover the product and buy it," Swenson added.
If not for the boxed retail SKU, "I think volumes for .Mac would no doubt be a lot lower," Swenson emphasized.
Apple's .Mac success is a reasonable alternative for some SAAS providers to follow, even those offering Web-based productivity suites. NPD's survey shows that typical viral marketing campaigns won't be enough for Web-based productivity upstarts to even modestly displace Office.
"There are still a lot of consumers that discover their software products by browsing store shelves, or getting a recommendation from a store clerk," Swenson said. "Between 10 percent to 30 percent of consumers that buy software discover new software products this way. If you're not going to advertise, it might pay to figure out a way to get your consumer SAAS product into the retail channel."
Swenson said that he couldn't over-emphasize the importance of retail shelf space, even for software services, like tax preparation. If H&R Block and Intuit "didn't have great fat-client software products to sell, I'd recommend that they put their SAAS apps in a box and push them in retail, too," he said. "Maybe this is a strategy for some of the smaller online tax prep companies that are trying to take on Intuit and H&R Block."
As for Web-based alternatives to Office, the channel strategies aren't working. Awareness is poor and very few consumers use the services. Microsoft CEO Steve Ballmer can sleep easy tonight.
[Editor's Note: Typo corrected in second paragraph. The 94 percent figure, as indicted by the chart, refers to "never tried."]
Comments (48)
RIP? Hardly!
If folks had tried web-based offerings and then gone back to MS-Office, your conclusion might hold true but if they haven't heard or tried of offerings in this space, how can they be written off?
Is the lack of awareness a marketing failure? Considering that most, if not all, web-based Office suites are still currently in beta and do zero marketing/advertising, your conclusion is premature - let these solutions mature into production-strength solutions (which should happen over the next year or so) and then measure their failure or success - both as a standalone metric and in relation to Microsoft Office.
The results of the sample survey though seems to be suprisingly close to the figures reported for Google docs (around 1.6 million users) and other online office suites like Zoho (400k) and Thinkfree (400k) - 0.5% of the 500 odd million Microsoft Office user population gives us a figure of 2.5 million! Kudos to NPD for coming up with a smallish sample that seems representative of the entire population...
Posted by Sumanth | December 17, 2007 4:08 AM
600 PC users? I don't think statisticians would allow us to take fair conclusions from this universe. Would them? :-|
Posted by Bert Marlow | December 17, 2007 4:12 AM
Goodness me, I thought experts have been telling us for years that these things are the future. I first tested online office suites probably 10 years ago (basically Java-based back then) and this is how far they've come?
Posted by Larry Seltzer | December 17, 2007 7:51 AM
I have to agree that web based office suites will not be an real alternative for most users, to Office Software on the desktop.
However, I ran across this article that is the real alternative, this is gaining in popularity;
Open Office is viable alternative to Microsoft Office
http://starbulletin.com/2007/12/17/business/technology.html
Some quotes from the link:
"OpenOffice is an open source office productivity software suite that runs on multiple platforms, including Windows, Linux, and Mac's, among others. The key distinction to open source software is that it is free. It can be downloaded from download.openoffice.org/2.3.1/index.html.
OpenOffice has actually been around for some time, with version 1.0 being released in 2002. Currently on version 2.3.1, OpenOffice is becoming increasingly popular and is a very robust, dependable product.
The OpenOffice suite includes Writer for word processing; Calc for spreadsheets; Draw, a graphics package; Impress for presentation preparation; and Base, a database tool. All of these claim compatibility with their Microsoft counterparts, such as Word, Excel, Powerpoint and Access.
In fact, it is this compatibility that makes OpenOffice so attractive. Writer and Word are virtually interchangeable. Same with Calc and Excel, and, let's face it, word-processing documents and spreadsheets easily make up more than 90 percent of all the files produced by businesses today
The compatibility extends beyond technical file formats. Users of the Microsoft products can almost immediately jump into their OpenOffice equivalent. Sure, some shortcuts are different, but the menus, buttons and icons are very similar.
OpenOffice has features that aren't present in Microsoft Office. We especially like the ability to export directly to a PDF file -- a function that is present in every product in the OpenOffice suite."
Posted by chips | December 17, 2007 3:05 PM
Bert Marlow wrote: "600 PC users? I don't think statisticians would allow us to take fair conclusions from this universe."
Hi, Bert,
For this kind of survey, 600 is plenty, as long as the people are properly qualified. NPD was very specific in usage scenarios. Had usage scenarios been vague, yes, even 6,000 wouldn't be enough.
Thanks,
Joe
Posted by Joe | December 17, 2007 3:05 PM
Joe, you suggested "Maybe too many people make too much about the Web 2.0 threat to Office." I agree, but those who do are mostly self proclaimed technical journalists who are in need of something to write (present company excepted). The average Joe (me) could care less what it's called (web 2.0) and only interested in something that works.
I expect the same percentage have not heard of Open Office either. Did the survey ask the 600 respondents how often they even use their PC based suite?
I would survey again in 10 years since PC based suites have now had a 2 decade lead, and people are entrenched in their locally installed apps.
Posted by Joe | December 18, 2007 10:00 AM
By this measure of long-term success, I think we should also be saying "R.I.P. Windows Vista".
Posted by SteveA | December 18, 2007 10:00 AM
The issue of statistical validity is less a matter of the number sampled than how the sample was obtained. The numbers are only valid for the sample sampled. Unless every PC user had an equal chance of being sampled (questioned AND responding), the population is not all PC users, but the population defined by the sampling. Larger numbers will decrease the uncertainty around the number for the population sampled, but they cannot make up for flaws in the sampling.
Even without a clear definition of the population of PC users that was sampled, I find it intriguing that 4.5% use Web-based productivity suites. Of the 95.5% that do not, how many use any kind of productivity suite? Among all users of productivity suites, how many only use what their employers dictate? Most interesting of all, how many people who have heard of online productivity suites would choose to NEWLY install either an expensive or a costless productivity suite, rather than use one that was web-based? (O.K., that last sentence was clumsy, but I was trying to avoid the confusion between "free" as in no charge and "free" as in freedom.)
Posted by htl22 | December 18, 2007 10:58 AM
@Bert Marlow:
As long as the sample is representative of the population, 600 people is more than enough.
Posted by Carl | December 18, 2007 12:35 PM
For what it's worth, the graph you're displaying says 3/4 of Americans have never heard of or used online productivity suites. Another 20 percent *have* heard the suites, but haven't used them.
This means the math in your second paragraph is off. you state 94 percent have never heard of the products, when it is in fact only 73 percent haven't heard of them. I think this is a significant enough discrepancy to warrant reexamination of the numbers, and perhaps an exploration of why the 20 percent haven't used the products despite hearing of them. It could be an actual lack of interest or need, or simply a "just haven't gotten around to it yet" reasoning.
Still, given the relative infancy of this industry (Google Docs, one of the first on the scene, began as a startup called Writely founded very recently in 2005), I think you're writing it off far, far too early.
Posted by David Chartier | December 18, 2007 1:14 PM
Before people can use something they have to know about it, so the real question is why don't they know about it?
I'd guess that 90% of web browser users don't know about right clicking links and the option to take control over whether a link is opened in a new window or tab and if they knew how to do this they would use it. Same thing with web office tools, if they knew about them they would use them. This is a fundamental feature of the browser that everyone should know but I constantly encounter users who do not.
A better measure would be to show 600 people how to use it, then check with them in 6 months and see what % are still using it. In fact most people use so few features of Word that google docs has all they need.
Posted by Joe Audette | December 18, 2007 1:50 PM
It's hilarious how the pathetic Google fanboys are jumping to the big G's aid. Face it--Google isn't going to make a dent in Office's market share, not with the pathetic functionality it offers compared with the robust functionality of a full-fledged VIABLE office suite. Face it, Google Docs SUCKS!
Posted by Paul Banner | December 18, 2007 2:06 PM
I do not only now Google Docs, I have even seen it. Now here is the question: why would I want to ever follow Google if I can use top class software like Office 2007? This would be like going back to stone age! I just hope we will see a more aggressive Microsoft again.
@Paul Banner: total agreement!
Posted by Reinhard | December 18, 2007 2:48 PM
Five years (It was launched in February)
You are waiting for a chick to lay eggs
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Google Apps is not yet a genuine competitor to Microsoft because it does not have an equivalent range. However, it is only a matter of time, according to Mr Gough.
"At the moment, we see the two as complementary because knowledge workers need Microsoft Office for the functionality. But in five years' time the two will be true rivals," he said.
Google Apps was launched in February. Business users include Proctor & Gamble and General Electric. Capgemini's first major corporate customer is expected to be announced next month.
Software as a service is a growing phenomenon. Analysts at Forrester say 12pc of global corporates already use the model in some part of their business.
Industry watchers Gartner predict worldwide revenues for providers will grow 21pc to $5.1bn (£2.5bn) this year, reaching $11.5bn (£5.7bn) by 2011.
www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/10/cngoog110.xml
Posted by Marco | December 18, 2007 3:38 PM
I think Google's growing list of customers, including some significant corporations like GE, Procter & Gamble, and Prudential, is sufficient evidence that web 2.0 suites are doing well, despite their comparative infancy:
http://www.google.com/a/help/intl/en/admins/customers.html
Remember: Office has been around for decades. Zoho, Google Docs and similar offerings have only been granted life with the recently maturation of some web technologies they're dependent on.
The varying target demographics and focus on features is also a good example of the right tool for the right job. Microsoft Office is built to be everything to everyone. While Google Docs inarguably offers fewer editing features, the ability for consumers, small organizations and businesses to share and collaborate real-time on documents in Google Docs for mere pennies on the dollar is a significant benefit.
I think the more important thing here is that competition is finally giving different segments of the market some alternatives that might fit better than Microsoft Office. Plenty of users, organizations and businesses out there need something above and beyond the basic productivity tools built into their OS, but paying hundreds of dollars for Office is not the right solution for them. Now there are options, which means everyone wins.
Posted by David Chartier | December 18, 2007 3:40 PM
My question how do you use these when you are not connected to the internet.
It seems to me by doing application over the internet you have just opened up a bit point of failure.
Will I have connection in the airport, bus terminals, and/or subway to the internet only to get to the application when traveling?
Also in a pressure cooker situation on the road where you are on the phone and one asks about a spreadsheet or some info in a document. What is the additional time requirements to retrieve data via an internet application compared to getting it from a local application (it being open office or ms office).
Are the benefits of internet application out weight the intrusive nature of getting to web applications?
Posted by ger | December 18, 2007 4:13 PM
Local
Open application | file | open | document.
Internet
Open browser | go to URL | logon to website | file | open | document.
www.buzzword.com
Use Case - Internet is down.
Local - still works
Internet Application - no worky.
Nice point of failure.
Posted by ger | December 18, 2007 4:18 PM
Much of our company has shifted to using a wiki (Confluence) for writing and maintaining documents (software specficiations, designs, documentation, ...).
They're online, simpler, better suited to just writing information and collaboration is much easier. A simpler set of formatting options results in a consistent style, makes you focus on the content rather than the presentation. Now every time a document is passed around as an 'old school' .doc file people get irritated.
I don't deny the quality of the MS Office apps, but most of the time you really don't need a complex full featured fat client - the extra weight just slows you down (eg who cares about pagination for an online document??).
So perhaps this is true of other users who want to go web based, they're bypassing clunky 'office' applications altogether.
Posted by Adrian | December 18, 2007 4:28 PM
But do all of the extra steps to get to a web app make it just as clunky as 'office'.
How clunky could ms/open office be to do just a simple document? Open word, type, save.
How do you get to the documents when one is not connected (no network)? Is there a stand alone client application and local copies of the documents?
Posted by ger | December 18, 2007 5:00 PM
That's right. Squeeze your eyes shut. Clasp your hands over your ears. Scream at the top of your lungs "It's not happening!" However, it won't help.
You are trying to judge Docs by looking at the first feeble steps in its life. It is nowhere near the bend in the hockey stick nor does it need to be. It, like Gmail, says "Beta" for a reason. It will take years till the Docs because a true alternative to full-featured desktop tools, if ever, but then that's not the point. Ah, but you clearly don't understand this.
The story and the comments are hilarious.
Internet down? Yeah. You'll look back in a few years and wonder why you couldn't see the writing on the wall.
---
Wooden shoes for sale! Not for wearing though!
Posted by Rob Scott | December 19, 2007 3:55 AM
Interesting article and although I subscribe to the fact that the present Web alternatives are not going to make a dent, I do not agree with the SaaS observation. Our dependency on the processing power surrounding us, and the ever increasing complexity of maintaining this infrastructure (TCO) will unmistakably drive us towards SaaS.
What has been lacking is the guts to discover new ways to merge the best of the mainframe-, and the Web-era. A technology capable to deliver Services at all times via any device, truly escaping the stiffening limitations of Web-technology while maintaining back-end scalability.
Result would be: OpenOffice.org becomes a fully functional service; view your spreadsheet via mobile; .....; approach your data in the cloud, and this via any chip based device (TV, PC, PDA, Fridge,). And if your connectivity is down, all applications (i.e. functions selected)that you need to continue working will remain available and upon restoring connectivity will auto-synch with your personal library in the Cloud.
And BTW, let's broaden our scope: Web 2.0 is just a minor part of the Internet. It is time that we start talking about IP-based home-automation; healthcare; energy ... i.e. about SaaS based apps that simultaneously will service billions of devices not using a fancy Web 2.0 GUI.
Is this fantasy? No! I am convinced that Web 2.0 is the prelude of this growing reality. A reality that will need to become part of our daily lives in the not so distant future, if it was only to take care of those massively aging baby-boomers (like myself) increasingly in need of "Remote-Healthcare" :-).
Posted by Marc Vrijhof | December 19, 2007 6:14 AM
Product adoption occurs through brand awareness and brand value.
Whether the number of respondents who are unaware of browser based productivity tools is 72% or 94% matters very little. These products have extremely limited brand awareness following five years of (tepid?) effort.
Brand value is all about perception and these products face a serious uphill battle to demonstrate value beyond that provided by the ubiquitous products in place.
I don't want to discourage innovation, but let's remember that sage advice "find an unmet need in the market and address it." The data seems to suggest that the need may not exist in the broader market - yet.
Posted by JB | December 19, 2007 10:10 AM
Probably this slow adoption of online applications is a good thing. Not only is the feature set not as rich as on the desktop but also core issues like privacy are not yet addressed properly. Example: On Google Docs a user can NOT completely delete his own documents/data. At least embedded images in Docs and Presentations remain on the Google servers even after the user deleted a document. This issue has been reported to Google 5 months ago and nothing has happened since then. Proof here: http://www.line-of-reasoning.com/issues/privacy-issue-google-docs-seems-to-not-delete-but-only-hide-documents-when-the-trash-is-emptied/
Posted by Ralf | December 19, 2007 11:48 AM
ger, "not being connected to the internet" isn't the point of failure you're making it out to be for most Office users. We are in our office with redundant, backup connections, or on client sites, with their redundant backup connections.
The point of failure is showing up to a client site and remembering the document I need is on a machine back at the office. Then futzing with a VPN that doesn't work through the client's firewall (if you're lucky enough to have one.) Then giving up and using hand puppets. A document stuck "local" is absolutely useless unless it's your recipes on your kitchen PC.
Posted by Jon | December 20, 2007 9:56 PM
being on the road with no internet connection would be the same issue as you poing out just reverse. Instead of being local on my laptop it is in the cloud that can't be connected to while on the road. Can't get to the app can't even to the document.
BTW ever thought of having someone else in the office email the document to ya. Or maybe getting a laptop so when you do go out on the road you have all the data you need. What if the client could not connect for some security or compatibility issues?
All I'm saying is that yes there are features to be gained by using the internet. But a hybrid system is better then an absolute system. Don't cut off your nose to spite your face. There still will be a need for local and remote access. The ability to use the application regardless if one is connected to the internet or not.
Synchronization is key
Posted by ger | December 21, 2007 12:56 PM
Yes. This stuff needs work and it needs to "conform" to the MS look, feel and functionality and "embrace and extend" from there. Most users are comfortable with MS Word and see little value in trying an alternative that is not popular
- Shelon Padmore
Posted by Shelon Padmore | December 24, 2007 8:03 AM
@Shelon Padmore:
Just which "MS look, feel and functionality"? It seems that MS has "forked" those very features in its office suite. Thus, conforming those features to the MS "standard" has diminished in importance.
I am one of those who has heard of, but not used, SaaS office suites. Right now, I do not see that they offer any advantages for me. However, as a business owner and my own network administrator, I have also REMOVED MS's office suite. Among the many reasons was what I considered to be the excessive barriers that MS put on maintaining the security updates. I can get MS compatibility through OpenOffice. It not only lets me know when an update is available, but it is hassle-free, and the price savings for a network is enormous.
Posted by htl22 | December 24, 2007 3:34 PM
Local
Open application | file | open | document.
Internet
Posted by varmısın yokmusun | January 30, 2008 10:46 PM
Product adoption occurs through brand awareness and brand value.
Whether the number of respondents who are unaware of browser based productivity tools is 72% or 94% matters very little. These products have extremely limited brand awareness following five years of (tepid?) effort.
Posted by oyun | January 30, 2008 10:47 PM
600 PC users? I don't think statisticians would allow us to take fair conclusions from this universe. Would them? :-|
Posted by oyun | February 9, 2008 12:11 PM
Ah, great to see the minority continue to SHOUT to the world that they re right and the majority of us who happily and without reservation use MS Office or any other MS product for that matter are idiots!
Let me see, Linux was going to be the death of Microsoft - Linux share going backwards. Then came Open Office and now Office Apps in the cloud - Microsoft posts record sales of Office and Office 2007. Next it is the iPhone and Google Android - Windows Mobile phones shipped something like 50m units, how many iPhones were sold?
Cmon please, just cause you are openly hostile to anything Microsoft and openly bias towards Apple, Google, Linux and Open Source does not make you right. Mac OS still ony represents 6% market share and the way most people on here are talking Apple and Google own the world have have amazing products and huge market share and are therefore superior products!!!!
There is absolutely nothing wrong with Office and there is nothing that compares to it. My productivity and everyone else in our company went up around 40%+ with the new Office 2007 and why would an Enterprise move from it to something which is "in the cloud"? I can access all my documents and files anywhere in the world both offline and online with Microsoft Office Groove and there is no comparison.
Posted by Martin | February 17, 2008 7:38 AM
I believe the statistic hold certain truth. I create alot of office documents in microsoft office suites and send out to customers. However, some of them told me they do not use microsoft office, and when i suggest to them to try google online documents, most infact none, have heard or use them before.
Posted by John | March 22, 2008 1:15 PM
Product adoption occurs through brand awareness and brand value.
Posted by acne skin care | April 24, 2008 3:12 PM
Result would be: OpenOffice.org becomes a fully functional service; view your spreadsheet via mobile; approach your data in the cloud, and this via any chip based device (TV, PC, PDA, Fridge,). And if your connectivity is down, all applications (i.e. functions selected)that you need to continue working will remain available and upon restoring connectivity will auto-synch with your personal library in the Cloud.
Posted by sinema | April 25, 2008 12:46 PM
Product adoption occurs through brand awareness and brand value.
Posted by kız oyunları | April 25, 2008 1:36 PM
There is absolutely nothing wrong with Office and there is nothing that compares to it.
Posted by çanakkale | May 4, 2008 6:33 AM
I can get MS compatibility through OpenOffice.
Posted by bozcaada | May 4, 2008 6:34 AM
There is absolutely nothing wrong with Office and there is nothing that compares to it.
Posted by Barcode Scanner | May 26, 2008 4:06 AM
The issue of statistical validity is less a matter of the number sampled than how the sample was obtained. The numbers are only valid for the sample sampled. Unless every PC user had an equal chance of being sampled (questioned AND responding), the population is not all PC users, but the population defined by the sampling. Larger numbers will decrease the uncertainty around the number for the population sampled, but they cannot make up for flaws in the sampling.
Posted by best | May 30, 2008 5:55 PM
There is absolutely nothing wrong with Office and there is nothing that compares to it.
Posted by İzle Dizi | May 31, 2008 2:15 PM
There is absolutely nothing wrong with Office and there is nothing that compares to it.
Posted by İzle Dizi | May 31, 2008 2:16 PM
I can get MS compatibility through OpenOffice
Posted by seks | July 4, 2008 12:35 PM
Office and there is nothing that compares to it
Posted by oyun | July 21, 2008 7:24 AM
Product adoption occurs through brand awareness and brand value.
Posted by oyunlar | August 2, 2008 9:27 AM
I like very much the writings and pictures and explanations in your adress so I look forward to see your next writings. I congratulate you.
Posted by Cyprus | August 7, 2008 7:42 PM
Product adoption occurs through brand awareness and brand value.
Posted by toner | August 11, 2008 8:41 PM
I like very much the writings and pictures and explanations in your adress so I look forward to see your next writings. I congratulate you.
Posted by North Cyprus | August 26, 2008 8:16 PM
There is absolutely nothing wrong with Office and there is nothing that compares to it.
Posted by toner | September 3, 2008 6:39 PM