The next version of Microsoft Office that you use is likely to be web-based. That is because Microsoft has finally joined the move to online applications and last week announced that a lightweight version of Office would be included in Office 14, du out next year. <\/p>\n
Microsoft may be fairly late in coming to this web-based game – Google Docs and Zoho have been around for a couple of years now – but it was inevitable that the company would take the plunge. <\/p>\n
Historically, Office has always been one of the keys to Microsoft’s success, even more so than its Windows operating system. Microsoft’s business division, which produces Office, returned an impressive 24% growth year-on-year in its most recent quarterly results, pulling in $4.95 billion for the company in that period. The client division, on the other hand, which is home to the Vista operating system, showed just 2% growth year-on-year and returned $4.22 billion to the coffers. And what is even more telling is that while Microsoft says there are 1 billion Windows users around the globe, there are only 500 million Office users, making the difference between the divisions even more stark.<\/p>\n
Which is why Microsoft is steeling itself to offer an online version of the suite. With players like Google in the market and online web applications improving daily, Microsoft simply has to become a player or risk losing market share. Even if it means that the company takes an initial financial hit. <\/p>\n
Opportunity<\/strong><\/p>\n Microsoft itself, however, is upbeat about the prospects of an online Office suite. Partly because the one thing that it can bring to the table is compatibility. Unlike its competitors who have to reverse engineer Office to make their web applications compatible with it, Microsoft already owns the Office formats. Translating those to the web environment is a whole lot more simple for Microsoft than for current and future competitors. And for users, 100% compatibility across documents will make the experience a whole lot better than 90% compatibility from other players. <\/p>\n The other opportunity for Microsoft lies is the tendency for users to create documents on their desktop in Microsoft Word or Excel, for example, and then transfer them to GoogleDocs to share with colleagues. With an online version of its Office suite available, very few users will feel the need to use GoogleDocs or Zoho but instead share them using Office Online. Which is good for retaining mindshare among users. <\/p>\n The one risk posed by an Office online, however, is the risk of cannibalizing the not-insubstantial Office revenues that are so key to Microsoft. Again, Microsoft is upbeat: "The world tends to overestimate the cannibalization risk. We see an awesome growth opportunity," Chris Capossela, senior vice president of Microsoft’s Business Division, told ComputerWorld<\/a> last week. <\/p>\n And why not? There are, by Microsoft’s estimates, around 500 million Windows users that don’t actually use Office. And many of those are users that work away from the computer desktop in manual labour jobs or similar. For those categories of users a lightweight version of Office which costs a lot less could be appealing, especially as it is provided by the dominant software maker, making it an easy choice. The opportunity is there for Microsoft to gain even more users than it already has. <\/p>\n Of course a web-based Office suite is unlikely to be entirely free. Either users will pay a monthly usage fee for access or there may be a discount rate for advertising-supported versions. But either way, if Microsoft can convert even half of its billion Windows users to a web-based Office suite there is a healthy income stream waiting for it. <\/p>\n