The new office wars
A new feature in its online Office suite allows users to edit documents, even if their Internet connection is unavailable. The development could spell trouble for Microsoft and its business model. Microsoft has ruled the roost in productivity software for more than a decade with its Office suite of applications.
The suite — its components include Word, Outlook, PowerPoint and Excel — has long been the de facto standard in office software. The company saw off myriad rivals, including Novell and Lotus, in the 1980s and early 1990s, and has ruled the roost ever since.
Now, Microsoft faces arguably the biggest threat yet to its Office franchise — from a company that is turning the business model for productivity software on its head. Google Docs, available online at docs.google.com, is still a fairly rudimentary collection of online apps — word processor, spreadsheet and presentations — but its radical new approach to office software may herald a sweeping change in the way you and I work with documents. And that has Microsoft running scared.
Think about it: with Docs, there’s no need to carry documents around on a thumb drive or to e-mail files to and fro. You simply connect to Google from wherever you are, access your documents, share them, and collaborate on them with others.
Until recently, though, Docs had one serious drawback: because it is an online application — in Net-speak, the software resides in the “cloud” — it meant users couldn’t work on their documents when they lost their Internet connection.
But now Google has introduced a feature that allows users to access Docs even if they have been disconnected. Docs uses new software called Google Gears, which caches documents to a user’s local hard drive. When an Internet connection is unavailable, documents are stored locally. The files are synchronised with Google when the connection becomes available.
The offline feature eliminates one of the biggest barriers to consumer adoption of Docs. It has also been ported to Google Reader and Google Calendar — the company’s Web feed reader and online calendaring applications. Gmail, its free Web-based e-mail application, is expected to be the next to get the Gears treatment — soon, Gmail users will be able to create and respond to e-mail offline.
With this new functionality, Google is building a powerful suite of software that could end the reliance most users have on Microsoft Office. Already, Docs can import and save files in Office file formats. And documents, sent by default as Office-format files, can be e-mailed directly from Docs.
Most big companies will be reluctant to adopt the Google suite, primarily because of fears and, in some cases, regulations about storing company documents on third-party servers. So it will be home and small business users, who also happen to be the most sensitive to the retail price of Office, that are likely to be the first to adopt Docs.
Microsoft knows this and is planning a rival product targeted specifically at home users. Details are still sketchy a nd it’s not clear to what extent Microsoft will allow its Office business to be cannibalised in its efforts to fend off Google. It may have no other choice, though: if Docs gains a strong foothold in the home and in small businesses, it will eventually find its way into corporate enterprises, whether those enterprises want it there or not.
Some analysts have suggested that Microsoft has an unhealthy paranoia about Google — evidenced, they say, in its audacious US$40bn-plus hostile bid for Yahoo. Watching the frenetic pace of innovation at Google, I believe the paranoia is entirely justified.
Google versus Microsoft discussion
First published as the column Technology & You in the Financial Mail of April 25 2008
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