Microsoft in 08: Still partying off the competitors
Microsoft in 08: Still partying off the competitors
January/February Edition, 2008: When you look down at the soup of icons on your desktop, there’s a good chance that several of them will be for various Microsoft applications. For a lengthy period of time they’ve been the biggest fish in a rather small pond, but the seams have burst and there’s now a school of decently sized piranha’s looking to carve themselves out a piece of the action.
One of the biggest products under fire is Microsoft Office, which has traditionally been the king of the shrink-wrapped software application suites. Having been the market leader for so long, it’s had a considerable slew of competitors over the years such as Lotus and Word Perfect, but there’s never been a contender with the heavy duty resources that Google’s entrance is bringing to the party.
While Office is still very much the front runner, the danger it’s facing from Google is more to do with the way the market is changing. With Google, it’s all about online based applications. As opposed to buying something off the shelf, it’s made readily available online through web based access that eliminates the contact with your local software vendor.
“We don't discount any competitor, as we take them all seriously,” says Harvey Sanchez, Online Services Strategy Lead, Microsoft Australia. “The Google Applications suite is an interesting proposition. Google originally started with the complete Software-As-A-Service model, but I think that even cloud-only companies are coming to the conclusion that there is an offline world.”
Another cause for Microsoft concern is the price, especially given Google applications are for the most part free to consumers and require a small cost for corporate use. This model reflects back on Google’s attempts to muscle in on the enterprise market, which is where the bread and butter revenue for Office comes from.
“Google’s Application Suite just isn’t enterprise ready; its threat is in the small business and student market. They will get some market share in these two key areas because small business and students don’t want to pay,” says Sanchez.
Interestingly enough, whether Google makes up any ground in 2008 may prove irrelevant as they have enough resources to sustain an assault on Office. But so far, the fight has been little more than a skirmish, with the industry bracing itself for the moment the pair decide to turn up the heat. Despite the threat, Microsoft remains quietly confident, especially given its 25 year run to date.
“Their (Google’s) products when compared to Office are very immature, their concept of the regular user only using 10% of office is very different because you can take an Accountant and a Journalist who will both be using a different 10% of Office and we cater for everyone”
Yahoo wants to play too
Yahoo has more daily visitors than Google or Microsoft’s Live Search, so they’re a difficult vendor to ignore. Once thought of as uninterested in the application software space, they surprised most industry watchers with the purchase of Zimbra for $395 million in late 2007.
Zimbra’s flagship product is its Collaboration Suite, which focuses on shared calendars, email management and online document authoring in a similar vein to Microsoft’s Outlook and Exchange. The Yahoo acquisition has raised questions as to whether the Californian based internet giant plans to move into the enterprise space, which would be outside its usual scope.
According to Sanchez, products like Zimbra and anything else that talks of the development of a word processor or an element of Office are considered a threat, though Microsoft believes continued innovation and communication with customers will allow them to hold the line.
Meanwhile Open Office is another interesting player rising through the ranks of its open source popularity and free code. It’s a completely different software model to Microsoft, but it’s gaining momentum with consumer and small business users alike.
“The whole concept of open source is very attractive even for Microsoft to adopt as a community, but there’s no commercial model,” says Sanchez.
Exchange and Sharepoint
One of the cornerstones of Microsoft’s dominance of the enterprise market has been the combined strengths of its mail collaboration tool, Exchange Server and the document collaboration tool, Sharepoint Server.
While the Google Application is just a threat to Office applications, other packages like Yahoo’s Zimbra come with server software and clients, making it a danger to other areas of the Microsoft business.
“Certainly we're watching it with interest, but we don’t see any huge threat there, Zimbra’s a great product and very interesting, but it doesn’t have that corporate creditbility,” says Johann Kruse, Unified Communications Tech Specialist, Microsoft Australia
“Exchange is by far the market leader and we don’t see that changing.”
Kruse explains both Sharepoint and Exchange have hit their post-Service Pack 1 era, which is traditionally the time when a lot of organisations holding out for the first major pack of fixes gets on board, so further growth for the pair of them are expected.
The Future
There appears to be several threats ready to tear chunks out of Microsoft’s market share, but none of them have so far lived up to their hype. Microsoft has also been fighting off major competition for years, so has a track record that puts it in god shape to defend their significant lead.
It’s early days though, and the latest fight for enterprise application software dominance is shaping up to be an interesting one, as all sides jostle for position in the online/offline hybrid world we now do business in.