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The tanks on Microsoft’s lawn are growing in number and firepower.
Never mind the brutal verdict handed out against Microsoft by Europe's competition regulator on Monday. This week three rivals – IBM, Google and Yahoo! – gave notice of their intentions to compete head-on with Microsoft Office, recently the software giant’s biggest earner by far. The stalwart suite of office tools, which includes Word and Excel, accounted for revenues of $4.6 billion – a third of Microsoft total sales – in the company’s most recently reported quarter.
Gallingly for Microsoft, given its dependence on Office licence fees, much of the threat comes from software given away gratis over the internet – a dramatic departure from its licence-based model, in which software is hosted on a user's desktop machine.
IBM this week unveiled Lotus Symphony, a suite of free desktop applications that includes document, spreadsheet and presentation software.
Hours earlier, the newly acquisitive Yahoo! announced that it had bought Zimbra, a start-up that specialises in online e-mail tools similar to Microsoft Exchange and Outlook – key parts of the Office family – for $350 million (£174 million).
At the same time, on the paid-for-software front, Google, the search giant widely regarded as the chief threat to Microsoft’s dominance, unveiled Google Presentations, an online version of PowerPoint, the Microsoft presentations tool known to millions of executives around the globe.
Microsoft is in danger of loosing the Office licence fees it has milked for nearly two decades, some suggest, as customers opt for alternative subscription-based services that are hosted by providers. Its business model – built around the PC – will not survive the internet age, they argue.
"Recent moves from Google and Yahoo! prove that the Internet is the only way forward for business,” said Lindsey Armstrong, co-president of Salesforce.com in Europe, one of the leaders of a new generation of internet-enabled “software as a service” (SaaS) companies.
“Companies don't want to buy and maintain the stack of software that the likes of Microsoft force on them.
“They want innovation, not infrastructure – why bother with costly implementations when you can subscribe to business applications in the same way that you do for other utilities like water and electricity? It’s the end of software – the tides are changing and Microsoft is losing its hold.”
Those sniping at Microsoft may have a point. Google’s new tool, for instance, will be wrapped into Google’s Premier Apps, a bundle of Office-type applications that already includes an online word processor, spreadsheet and e-mail, which compete with Microsoft Word, Excel and Outlook, respectively.
“This constitutes a real threat to Microsoft’s business model,” Tom Austin, of Gartner, the technology analysts, told The Times ahead of the Premier Apps launch earlier this year. “Eventually, it will have to switch from limited-use licences to software as a service. That will require a fundamental re-engineering.”
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Time, as they say, moves on. If you wanted to play industry analyst then you would be looking beyond the ravings of the WEB2.0 Evangelists towards a broader view of what is happening.
Words such as Virtualisation, Application Streaming and On demand Application Delivery should appear before your eyes.
Microsoft/SoftGrid Citrix/Altiris Symantec/AppStream Thinstall Endeavors Technologies.
Consider what they are doing with Established software packages. Software as a Service is no longer limited to what someone can cripple to work in your Web Browser and there is no need to lose control of your data.
Open Office has come up a few times in this discussion. You can download the full package from OpenOffice.org or you can go to http://www.stream24-7.com, register, install a player and then stream it.
You get the full package, it runs on your computer, your data stays with you and the same can be done with any other 'real' application.
Try it then consider the possibilities.
Keith, Ipswich, England
I don't think anyone is saying that software delivered as a service will replace all software anytime in the future. we only have to watch the trends to see where SaaS model makes sense. SaaS has been very good at functions such as CRM and elearning, accounting for 22% and 70% of these markets respectively. Other functions that require high levels of confidentiality and availability like banking and financial functions may not readily be surrendered to a third party.
Certainly many SaaS models make sense (i just paid for a dedicated server with hosting and firewalls and backup for peanuts, literarily) and i believe that this will continue to drive the model.
We can expect that entrepreneurs will continue to come up with software service models that make sense and with time the SaaS concept will eventually live up to the hype.
oladele Ayuba, Lago, Nigeria
Did I just see someone use the word "stable" in the same sentence as "Microsoft"?
Steve, Derby, United Kingdom
I have no trouble using OpenOffice etc. for word processing, but the big problem is that other software I use works with Office, and only Office. Other software manufacturers have make their software more flexible, or I'm stuck using Office.
starling, Lancaster,
And when the local Wi-fi hotspot is overloaded because the resturanteur didn't pay for an upgrade ... ?
Additionally, Excel (the most popular with business users) hosts add-ons for may corporate core systems such as Hyperion and SAP. Will corporations really trust an internet download, or live connection, that handles their most confidential data. I think not.
And that's before we even reach the issue of office automation using custom macros in MS Office. And then the corporate decision to move from, say, Yahoo to Google because the price is better this year, but everyone's spreadsheets and presentations suddenly don't work.
It's a PERSONAL COMPUTER and the user wants control, not surrender toa faceless corporation. The day people are prepared to use publicly-owned pool cars on a first-in-first-served basis, the scenario you paint above might have a little impact on the market. Until then, it will remain a fad and will vanish just as quickly.
KR, Stockport,
this is just a re-hash of the old argument, that comes around every few years, corporate users have had big enough pipes for a long time to have server based applications and it hasn't happened yet. MS office may not be the best, but it's widespread use, and more importatly now influential user base will ensure it stays the corporate standard.
Ron, Rome,
The suite's not that important in the end. What the article doesn't mention is that if the software isn't on your desktop and is instead on a corporate's machine, then the content that you create is knowable by the corporate.
This is the case with YouTube, LinkedIn, Facebook, etc., is the case with your Google, Yahoo, etc. search history, and is the case with Google mail, hotmail, etc. similar but different is you loyalty card data. On and on I could go.
We've already surrendered a colossal amount of personal data to corporates - adding our word processing, spreadsheets, etc. would mean a colossal increase.
If that in itself doesn't bother you, have a read of the Patriot Act.
Gav, Montrose, Scotland
Agree with some points of view. For home users, and many small businesses, OpenOffice does the job perfectly. If Open Document standards can be applied, Microsoft will have to adjust their position.
I would suggest that if Microsoft dropped the price of MS Office fewer people would look for legal, or illegal, alternatives.
The authorities that are insisting on open format documents are to be congratulated.
Keith, Madrid,
I've used Open Source Office and I liked it, but there is something that always forces me to go microsoft. I like microsoft products despite all the bugs and security issues. Although there are many alternatives to Microsoft's products, but they'll never be like Microsoft's. Not only that, but microsoft has deepened its roots in to the minds of its customers and all. People are familiar with Microsoft, and that's one of the biggest factors for microsoft's success. People don't have time to learn new softwares and to trust their vendor. Nonetheless, there could be or come a very user-friendly Office-like softwares, but still I believe that they will merely affect microsoft's business.
Qasem Nejrabi, Kabul, Afghanistan
Just wait until Google starts selling their Apps package bundled with a Sun "Project Blackbox" portable datacenter in a crate to companies. Then they get SaaS AND they still have total control over all their data. Snap.
alucinor, Kansas City, MO
Computers are bad!
A Smith, Birmingham,
The expense of maintaining software office suites on internal PCs is huge in the corporate world. There are cost and many other advantages to going online with it but one significant drawback ... security. Certain corporate users are never going to allow IBM or Google or Yahoo to host their sensitive corporate documents online. I see it more as a situation where the open source office suites continually chip away at MS Office market share but never kill it.
Joe, St. Louis, Missouri, USA
thanks Brint, I love OpenOffice. That program helped me when I didn't have MS Ofiice. I actually donated to them.
Kevin, Lancaster, pa
While it is important that companies keep costs for doing business down, internet based free or for-pay office suites offer little guarantee that documents created by such suites shall be secure from government or private sector spying.
Outside of business use I personally perfer to pay once for the use of software and not worry about subscription fees for several years. (Fees collected either as advertisements I have to see in my "free" software or real monies spent on subscriptions.)
Bill, Baton Rouge, LA
The internet rivals have very weak offerings, and architecturally they will NEVER equal MS Office on a client.
AJAX is the WRONG technology!!!!! These internet "competitors" cannot even change a number in the spreadsheet without talking to the server.
Google Apps are a nice joke - use Google Show and you wil know. The output of these products look SICK.. If this is what a $200Billion company can make, forget these fake "products". It will only sell more Microsoft Office!!!!
Tony, Bangalore, India
well, in 90% of the world the internet is not stable enough for these online affice tools to be competetive to MS... I will stick to my stable system with MS office on it....
Eric, cabarete, DOminica
Software as a service (SAAS) is not yet proven. In fact, the amount of revenue that all companies make using the SAAS model is pathetically low.
MS have little to fear.
As a business user, which would you prefer? A secure, readily available word processor, spreadsheet and presentation software (MS Office) sitting on your machine or some relatively unsecured software sitting far far away on some server (Google, etc), needing a fast internet connection to access?
SAAS has far too many issues to be ironed out before it becomes a real threat to the PC, license-based model.
Kunal, Cupertino, CA
This article misses the point, and the people who have posted before me have fully realised it. On-line virtual office products are all very well but they are not a genuine replacement for Microsoft Office. Open Office is a direct competitor for the highly flawed Microsoft Office 2007, doesn't require a network connection and is free.
There is no reason why it shouldn't be standard issue in the office environment.
Liam Thom, Rookley, Isle of Wight
I've been using Open Office for several years now and wouldn't even think of paying an arm and a leg for MS Office. As has been mentioned, for 95% of users its no different to Office and even here most people don't and aren't interested in the finer points and in depth features. The 'free' Microsoft Works that comes bundled with most PC's these days is the biggest waste of space ever as people want word compatibility but without the price tag. Most home and many business users rarely create a spread sheet or presentation but do need the reader part. For documents the most home users achieve is a simple letter and to pay over 100 pounds to MS just for this is a rip off.
Mike, Alicante, Spain
I switched to Open Office when MS Works, let alone Office, got too expensive for my tolerance. There's a big difference between can tolerate and will tolerate.
Fleetwood Simca, Pikes Peak, Colorado
Open Office anyone???
Its compatible with Office and its free....
Dale, London, England
The thought of putting my spreadsheets and word documents on a server, online, bothers me just a little. I prefer having these items on my computer, behind a firewall.
Smiley, Midland,
Ravilyn: Microsoft has moved very little forward. Apple has done all the innovating and MS has struggled to keep up. Now MS will struggle to keep up with the online offerings.
k.alan, London, ON Canada
For a few years I used the free 602 PC Office Suite, and it was excellent. It was compatible with Micros**t . It also had one of the best photo editing suites I have ever found. Sadly it's no longer free. There are other freeware ones but I didn't find any that were as good as the 602 Suite. I don't want to use an online word processer. I would rather keep the files on my PC. I use Wordpad now, which isn't good, and the free Picassa photo suite which is excellent.
My favourite quote, though I can't remember who said it :-
"I'm not one of those who think Bill Gates is the devil.
I simply suspect that if Microsoft ever met up with the devil, it wouldn't need an interpreter. The path to Hell begins with Microsoft."
I wouldn't have Vista at any price after seeing it "at work" on my friends PC. Sure, it does have all the bells and whistles, but what's the point if you don't need them? I had to delouse XP as it was. When XP isn't supported by Micros**t any more, Linux here I come.
Beryl, WINDSOR, England
The thought of having to have another subscription service where I have to sign up for a two year contract to get better pricing and have to provied my credit card number so that they can quto bill me nad all the other crap that goes along with this just pains me. I am on old guy who doesn't particularly like the changes I am seeing coming with "software as a service." I concur with Andrew Taylor of Brno, Czech Republic in that companies should agree on a file format. There is sufficient competition available in the user interface and features that would easily distinguish software vendors and metadata could take care of any additionally perceived limitations of the file format. I for one do not look forward to software as a service since the only ones being served are the software companies bottom lines via a direct connection to my finances. I don't have to re-up my subscription yearly with boxed software!
Bob Wilson, Warrington, PA, USA
Bill Gates had vision, made billions...heros come and heros go.
Bye Bye Microsoft, time for a new reign of power, besides if Microsoft gets downsized the housing market may become more affordable in the Seattle area.
After the bag of bling called Vista MS tried to shove at us it is time for a change.
R Kruml, Sedro Woolley,
I don't particularly like Microsoft, but I can't imagine owning a computer that doesn't have MS Office installed on it.
J Baustian, San Diego, California
Andrew Taylor of Brno, Czech Republic,
You are correct in saying all companies want interoperability. They don't want my wordprocessor can't read your files ever. But the correct way to demand interoperability is to ask all wordprocessors to use a common file format like ODF.
You can have perfect interoperability in our light bulbs if we all decide to buy Philips light bulbs only and we upgrade all our fixtures everytime Philops changes the design. Would we do that?
Information is the lifeblood of corporations. Storing it all in a format owned by another company and agreeing to pay license fees for ever to have access to your own company's data is madness. Demand smooth working together. Demand Ms-Office reads and writes files that can be read and written by its competition perfectly. Just demand the same level of interchangeability that you expect in car tires and batteries.
Ravilyn Sanders.
Ravilyn Sanders, Rust Belt, USA
Keep in mind that because of Microsoft and prevalence of all types of software including operating systems (windows), office applications, games, browsers, etc., millions upon millions of people are employed, directly and indirectly. If anything, people should be grateful to Bill Gates and his vision.
John Taylor, London,
It's interesting, Microsoft attempt to re-write large sections of code and people complain that it doesn't work and why didn't they keep the old one, but just as many people complain that the "old one" doesn't work properly either.
Microsoft moved the PC market forwards, does anyone remember the days of MS-DOS, DR-DOS and PC-DOS with the multiple word processors which didn't talk to each other. Word Perfect for DOS anyone!
Microsoft software survived not because it worked properly with Windows/DOS, but because it works the way offices want to work.
If someone can find a better solution, good luck to them as competition will only make the software even better, but people please stop bashing Microsoft (not Micro$oft, that's just sad). Remember software is written by humans not machines, so there will always be problems. That's why it's called Human Error!
Andrew Taylor, Brno, Czech Republic
It is true that online services are going back a step, but you must also understand that back then your connection speed was at 28.8. Very few people could afford high speed connections. Today everyone and their grandfathers has Broadband (I just get my grandfathers up yesterday), However, you can't deny the power of local apps. Which is why I assume that the best thing that could happen here is that you get a local app with your documents, and when you go online it would sync with some server.Allowing you to go anywhere else to any computer and access the same file on the same app through the web. The problems is Hackers and data security because there are alot of documents that should not ever be on the web. I dont want Homeloan papers and other bussiness related documents to be stolen.
Tom, Artesia, CA
Since no one made mention - I assume this is geared toward Windows users - I will bring it up. iWork. It's quick, reliable, slick, cheap, and most importantly, effective. I use it for pretty much everything at this point now that Numbers has been included.
Mike Wyant Jr, El Cerrito, CA
It's good to see more choices, and the EU ruling doesn't kill microsoft it just opens the door for future litigation for remedies. I hope that this will lead them to open their API specifications and allowing interoperability, so they can compete on merits rather than abusing their monopoly position continually. All of this is probably good for Microsoft in the long run, as much as they talk the talk about innovating, they have very little incentive to make substantive improvements in their technology other than cosmetic ones. This will drive them to refocus on their often stated but poorly executed technical ability.
Michael Costello, Pflugerville, United States / Texas
A major part of the Office customer base is the business user, who WILL never move lock stock and barrel to something which he can not lay his hands on ALL THE TIME.....! This is the reason that ASP based solution models failed miserably......no company would like to have its data and other business information floating around in the ether.
Where Office can improve is the area of collaboration....In spite of all the bells and whistles we see about collaboration, Office is still a pretty individualistic an application.
Rajeev
Rajeev, Mannheim, Germany
The important thing is not the software or how it is delivered. The important thing is the document format. Users are beginning to demand Open Formats such as the ISO standard Open Document Format (that Miscrosoft hates). If a software package can read and write turely open formats then nobody has a lock on the market.
J Davies, Inverness, UK
One more reason to switch away from Microsoft is that the new Office 2007 Suite is slower, inflexable, not quite compatable with earlier versions and includes a completely new user interface that most experienced users consider unfriendly.
Bottom line, people using the new Microsoft Office are less productive than those using competitive products or earlier version Microsoft products.
Robert Goard, Deerfield Beach FL
Robert Goard, Deerfield Beach, Florida
People continue to project alternative Office Suites as the threat and yet despite using others myself I have defaulted back to Office because it's simply better, particularly Office 2007 even with it's backward compatibility issues. Lost connectivity also eliminates the web from being the defacto solution. It has similar issues to hosted terminal services. Loose your internet and your done. Applications that can function online and offline simply are superior and going back to the old days and old ways is delusional. Unless you live in California or the likes you have collectively faced the reality that there are places the Internet just isn't effective just like wireless cell reception. Having said that naysayers will continue to project the end of Office dominance because if they didn't, what could be written about it except just how good it really is...and the fact it works.
Tim Magill, Collingwood, ON
While the infrastructure has improved in reliablity, there are still times when the network goes down. I don't want to have to depend on the network to get my jobs accomplished. I have used OpenOffice when I set up computers for friends and clients at home mainly because they want to pay as little as possible. Inevitably, I will come back later and they have added MS Office to the box. There has to be more to this than price.
Ralph Beatty, Lakewood/Wa,
Why did the article not mention the free suite, OPENOFFICE. One of its principal strengths is that it reads and writes documents that are largely compatible with MS's Office Suite.
BRINT, Baltimore, MD
Many of you don't really remember DEC, Wang and the IBM of the Medieval 1970's and 1980's. It was the portability and "personal" power" provided on the desktop that allowed Microsoft to take over the world. Going back to a model where services are disconnected from the user's direct control is a step backward, if that's the only available alternative. I do bel;ieve Micreosoft is right on this one too. There will be online application tools and services in conjunction with the power of local applications, so that users can maintain their independence.
Chris Michaud, Westford, MA