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A few days ago Microsoft announced something that they didn’t want to do but everyone knew they had to do – start the roll out of an online browser-based version of Microsoft Office.
Microsoft’s move to a web version of Office is being done with little real enthusiasm. Microsoft Office represents the majority revenue stream for the company – more so since Vista has been such a relative failure in the marketplace. Microsoft would love to keep selling Office as software, maintaining the regular income flow that each new version represents. But the company could not ignore the increasing popularity and compelling features of online rivals from Google and Adobe. Office on the Web is an effort to keep customers in the Microsoft fold which is preferable to losing customers entirely.
An ad-supported version of Office on the Web means that the power of word processing, number crunching and communication will become available to people all over the world who could not possibly afford a Microsoft Office license (let alone a computer and Windows).
Office on the Web is also a shot at free or low cost software rivals like Open Office and ThinkFree. A free / ad-supported version of Office in your browser might be preferable to customers rather than switching to different non-Microsoft Office software. It’s a low-price Office alternative which doesn’t involve dropping the price of the full Microsoft Office software too low.
The trick for Microsoft will be putting enough in the online version of Office to make it a viable alternative to Google Docs et al while not going too far and undercutting the ‘river of gold’ revenue from sales of traditional Microsoft Office software.
Our preference would be for a more fully featured version of online Office made available to paying customers as part of their purchase of Microsoft Office software. For example, buy Office 2009 (or whatever it’ll be called) to install on your computer including a license to use the fully functional, no ads ‘Office on the web’ for the one price. Microsoft will probably prefer to sell their software plus some lame ‘trial period’ of the online system ending up in the customer paying more for extended online use. The problem with that scenario is that customers will object to paying ‘extra’ and move across to Google’s free offering instead. Microsoft would prefer to sell Office software and use it as leverage to extract more money from the customer later but customers prefer to have a single up-front price to pay with no further demands for money.
At Office Watch we welcome the appearance of an Office in the browser from Microsoft. Microsoft Office is rightly the market leader and it’s good to see that expertise extended into new areas which will make it available to more people and on more devices. But let’s not kid ourselves - Microsoft isn’t doing this out of the goodness of their hearts. Redmond is moving Office to your browser because they were dragged kicking and screaming to it.
Article posted: Thursday, 30 October 2008
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