By ASHLEE VANCE,May 11, 2010, The New York Times
Microsoft has created a chimera in its new Office 2010 software, part desktop software and part Web app.
This latest version of Office, which includes applications like Word, Excel, Outlook and PowerPoint, is Microsoft’s long-awaited effort to modernize one of its most lucrative products and to thwart rivals like Google that are nipping at its heels with free Web software.
For the first time, Microsoft will provide a free online version of Office that lets people store their documents on the Web rather than on their personal computers.
If all goes according to Microsoft’s plan, this technology, along with a host of other features, will persuade businesses and consumers to upgrade their Office software once again. “It is a remarkable moment,” said Stephen Elop, the president of Microsoft’s business software division, who will showcase Office 2010 on Wednesday at an event in New York.
It is now available for businesses. Microsoft has said that Office will range in price from a limited, free Web version supported by ads to a full-blown version that costs $500, both to be available to consumers in June. Most analysts say they think Microsoft will hold on to its near monopoly on productivity software. Richard Williams, the senior software analyst at Cross Research, said that most companies would continue to choose Office because it was familiar and safe. “This is not the cycle that will take away from Windows or Office,” he said. “Most of the people calling the shots and paying the bills are in their 40s, and grew up with Microsoft.”
Nonetheless, a host of businesses are chipping away at Microsoft either by offering free versions or by recommending to clients that they buy fewer copies of Office. “I think Office has run away from its users,” said David Girouard, the president of Google’s business software group. “Every company ought to have a few copies of it, but it has nothing to do with what most people need.”
Users of the new version of Office will be able to share and work on the same documents and presentations over the Internet rather than e-mailing files back and forth to each other. Microsoft has created a way for people to flip from the PC to online versions of Office to give users the best of both worlds.
If many of those functions sound familiar, it is because Google, Adobe and smaller companies like Zoho have been giving away Web-based apps that do much the same thing. But the rival products have hardly made a dent in the sales of Office — a product used by 500 million people.
Over the last three years, Microsoft’s share of the office software market has remained static at 94 percent, according to the research firm Gartner. Adobe ranks second in office software revenue with almost 4 percent of the market, leaving scraps for about eight other companies. Microsoft’s business software group brought in $19 billion last year.
The vast size of this productivity empire and the software’s growing complexity has made Office a popular target for Microsoft’s competitors over the years. Rivals like I.B.M. and Sun Microsystems, now part of Oracle, have backed a free productivity package called OpenOffice that performs most of the functions found in Office. About 25 million people have signed up for Google Apps, the company’s online suite of software that is similar to Microsoft’s business products.
According to analysts, Microsoft still has little to worry about. It has benefited from linking features in Office to other business software products in the company’s arsenal and as a result, has been able to coax customers into large, unified upgrades. Numerous Wall Street analysts expect that strategy to pay off well for Microsoft this year. Many large companies skipped over previous versions of Microsoft’s Windows operating system software and continue to rely on four- to five-year-old computers. Analysts expect that these customers will finally upgrade their machines and software, particularly after Windows 7, released last year, received favorable reviews.
“I think we will see this refresh cycle kick in over the summer,” said Mr. Williams, the software analyst. “It is going to be big and matter a whole lot.”
Jason Lieblich sees that as an opportunity. Mr. Lieblich has started a company called Exoprise Systems that will soon begin selling software that monitors computers to see what types of products workers use and how they use them. It will then guide customers away from traditional applications like Microsoft Office to cheaper online alternatives.
“Office is a great product, but it is quite complicated and people aren’t really taking advantage of the software,” Mr. Lieblich said.
Mr. Elop put in his vote for a mostly Microsoft future, knocking the idea promoted by Google that companies use both Office and Google Apps side by side.
“It clearly shows their lack of maturity and lack of understanding for the business market,” said Mr. Elop, the Microsoft executive. “Companies don’t want to mix their technology.”
MS-Office Web Preview:
http://www.officelive.com/en-us/web-apps-preview
-Source: The New York Times-
http://query.nytimes.com/gst/fullpage.html?res=9C03E4DD133BF931A25756C0A9669D8B63
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