Microsoft’s Office is undergoing some radical changes. The latest version, unveiled during a high-profile event July 16, includes substantial social-networking features (thanks in large part to Microsoft’s recent acquisition of Yammer) and cloud functionality.
But will that be enough for Office to maintain its commanding share of the productivity-software market? At least one analyst thinks the platform remains somewhat vulnerable to rival offerings.
“Productivity apps for post-PC devices are flourishing,” Sarah Rotman Epps, an analyst with Forrester, wrote in a July 16 blog posting. While many of these products are complementary to Office’s core features, “others—notably QuickOffice, which was recently acquired by Google—are very, very dangerous to Microsoft, precisely because they are easy to dismiss as not as good as real Office.”
That might seem counterintuitive, but Epps has an explanation: QuickOffice’s user experience isn’t necessarily as rich as Office, but “it’s a lot cheaper, and it works across devices and platforms.” Combine that with Google’s ownership, which all but ensures QuickOffice’s presence on a vast number of smartphones and tablets, and “the little competitor that was easy to ignore just got a whole lot more powerful.”
Is a feature-rich platform like Office truly vulnerable to a cheaper, more stripped-down, and easy-to-access competitor? Whether or not that’s the case, Microsoft seems to be taking no chances: the new Office incorporates the cloud in a way that is clearly meant to counter Google Apps, QuickOffice, and other supple, online-centric rivals.
“Going forward, Microsoft’s business cloud offering, Office 365, becomes the lead platform for new introduction of functionality,” Rob Koplowitz, another Forrester analyst, wrote in a July 16 blog posting. The use of Microsoft’s SkyDrive as default storage for documents emphasizes Office’s new “cloud first” alignment; in addition, personalized settings (including templates and custom dictionaries) will “roam” across virtually all devices.
In conjunction with the new Office unveiling, Microsoft is introducing three new Office 365 subscription services: Office 365 Home Premium (with 20GB of SkyDrive storage and 60 Skype world minutes—an offering aimed at families and consumers), Office 365 Small Business Premium (business-grade email and other tools for SMBs), and Office 365 ProPlus (more advanced capabilities and management tools, for enterprise customers).
Office 365 was originally positioned as the prime competitor to Google Apps and other cloud-based productivity platforms, while Office held its own in the traditional (i.e., desktop-bound) productivity-software space. Now the entirety of Office has been aligned to meet the new market.
“Microsoft is taking a very traditional approach to a market that is undergoing massive disruption,” he added. “Their approach is about enticing users through deeper and deeper integration.” Indeed, that integration could drive IT to the crux of a decision: invest in what he terms “the Microsoft battleship” and its new cloud and social-networking functionality, or rely on a suite of disparate services including Dropbox, Box, Jabber, and others.