Microsoft Hopes to Build a Complementary Revenue Stream with its Online Office Suite
October 28, 2008 |
It is invariably entertaining to watch Microsoft trying to ensure some online presence for itself when all such attempts look mostly like the company is the last to realize internet is actually a serious business and decides to do something to catch up when others are already heavily competing in the field.
The current Microsoft’s Professional Developers Conference in Los Angeles is a great example of this trend with yesterday’s presentation of Windows Azure, the attempt to get to the cloud computing business with its own platform-as-a-service offer, and the final promise to bring some of the applications of the Microsoft office suit to the browser in the next release (but there’s no official release date for Office 14 for now but I tend to believe Mary Jo Foley that late 2009 or even some time in 2010 is quite realistic).
The applications we are supposed to be able to use in a browser are Word, Excel, PowerPoint, and OneNote. The applications will use both HTML/AJAX and Microsoft’s own Silverlight technologies so if Silverlight is detected on a computer, the Silverlight-based version will be launched.
The online versions of the popular Microsoft productivity applications will be somewhat limited (or “lightweight” as they call it in Microsoft) but the software giant promises they will be comparable to Google’s online office applications. What we now know is that the applications will surprisingly work in the three major browsers (Internet Explorer, Firefox, and Safari, not in IE only) and will allow users to create documents, edit them and collaborate on them as well.
The Office web applications will be available both for free (they will be ad-supported in this case) or for a fee as there will be volume licensing and subscription-based options.
For the vast majority of users of the desktop office applications by Microsoft I think the most important part is the ability to synchronize the documents on the desktop with those in your account online so that you could access the latest versions of the documents you create on your home computer from your office or from an internet café whenever you need them without additional hassle of uploading them online. There are no details on exactly how the synchronization will work but this is the functionality that really sounds promising.
In this case you actually use the online version of the applications as a complementary one to that you already use on your desktop. This approach obviously won’t require you to necessarily pay for an ad-free version of the online applications since when you only occasionally need to use it you can probably live with some ads as well.
Obviously the key for Microsoft is to continue making money with its “software plus services” approach where users will have to pay for at least something – either you pay for the software you install on your desktop or for the subscription to the ad-free online version. But ideally a user both installs the software and pays for the ad-free access to the service via the browser – so it could be a yet another revenue source for Microsoft as well if it manages to persuade enough business and power users they actually need to use both online and offline tools enough to pay for both.
Mathew Ingram asks an interesting question about the possibility of Microsoft online office applications competing with the desktop Microsoft office. His conclusion is that Microsoft will make their online offering strong enough to make people switch from Google but still limited enough for people not to switch from desktop to online applications. I agree with Mathew as I tend to think Microsoft is building an additional source of revenue, not a competitor for itself. Of course the right balance will be hard to find here for Microsoft not to damage its own business by finally realizing it is time to go online but if it plays wise enough by offering the paid service that actually enhances paid software it could really end building an additional revenue stream for itself.
