Do Web Versions of Office Applications Hurt Microsoft or Google More?

So Microsoft (MSFT) seems to have finally woken up and decided to get serious about the Web — or at least semi-serious — by rolling out a cloud-computing platform called Azure and announcing the imminent arrival of Web-ized versions of its Office applications (my favourite response to these announcements came in a Twitter message from Sarah Perez of Read/Write Web).

Obviously, the Web Office news is a shot across the bow of Google (GOOG) and its Google Docs — Microsoft is even using mostly Ajax just like Google, instead of its Flash-style Silverlight technology. But who does the rollout of a Web Office hurt more, Google? or does it hurt Microsoft itself?

I don’t know the answer to that question, but I still think it’s worth asking. No doubt many users of Google Docs will shift to Microsoft’s version, in part because it will make integration with their existing corporate systems easier, or because their employers will make its use mandatory. Others may find that Microsoft’s Web apps offer better compatibility with regular Office programs (something that Google Docs still isn’t that good at, at least when it comes to advanced page layout and that sort of thing). But what about the competition between Microsoft’s Web Office and the real Office?

I would imagine that Microsoft is going to try its best to make Web Office just useful enough to entice people away from Google, but not nearly nice enough to tempt them to drop the regular installed version of Office. But no matter how hard it tries, there are likely to be small or medium-sized companies that decide it’s just as good to use the Web version as it is to pay $300 or whatever per seat to get an authorized copy of the desktop software. That’s going to be money right out of Microsoft’s pocket, since Office generates truckloads of cash for the software behemoth.

Maybe Microsoft will be able to manage the process so that it doesn’t cannibalize its Office franchise too much, or maybe it will err on the side of crippling the Web Office so that it doesn’t harm the installed software versions. But either way, that’s a tricky balance to strike.

Disclosure: None

Comments

[NW Tech:]

I recently spent a week at Google HQ to train about GoogleApps. After one week of intense training, I must say that GoogleApps is in no way ready for prime time in ANY sense of the word.

The Google team told us that they are having substantial issues flipping users from the FREE version of GoogleApps to the PAID version. Once someone gets something for FREE, why should they pay for a small incremental change?

GoogleApps itself is a BETA product that is at least 18 months away from thinking about posing a threat to MSFT office. GoogleApps has a weak word processor, an even weaker spreadsheet and the colaboration tools are a work-in-progress.

It was very obvious that the entire GoogleApps team have never shipped a real live product to business users...ever!

The presentations were mixed and contradictory. The information given was weak and and the presentors even weaker.

Google shareholders should be happy that their fortunes are NOT tied to the GoogleApps group.

Search is still Google's only revenue and profit spigot.

GoogleApps won't contribute much to Google's revenue and profit picture...ever!

2008 Oct 29 06:48 AM

[Tom B:]

MSFT won't gain any traction here because they have zero credibility with regards to security and tend to do quite poorly wiith regards to usability. It is good they are using mostly AJAX, though, since Silverlight has a limited future.

2008 Oct 29 10:01 AM

[steveballmer:]

Answer: Google!

2008 Oct 29 12:35 PM

[Jonathan Scott:]

If a company makes it policy to use the web version of Office it is probably because they want to get away from the pirated version of Office they are currently using.
I have seen 2 examples of companies that bought 1 copy of office and put it on hundreds of PC's. These cheap scats with happily use the web version and think they're now 'legal'

2008 Oct 29 12:36 PM

[Commodity T...:]

Good for Microsoft and good for Google, they have a new rival in webtown.

2008 Oct 29 01:31 PM

[jack dee:]

Well lets start with correcting the idea that this is new.

It is not really new. Office has been growing online for years, they offer vast amounts of templates tools and information, etc etc. They have been offering this across the planet, sure if you live in the vally and want to have the love child of aaple goog, then you might think this is a new move for msft , but if you live on planet earth this is just another step on a journy that began some years ago.

(long goog , it may be a one trick pony but it is a very good trick.)

2008 Oct 29 02:06 PM

[Good Point:]

product sales or not, first thing is its quality. In the past, i have seen openoffice, startoffice, wordprefect, and a few more. no one can be even close to the quality of ms office. Talk about technology strength, google is probably in class Z. you have beat openoffice first, then talk about others.

the only thing that google know earlier than others is ajax. that is just a programming trick of some 20 lines of text. mind you ajax is based xmlhttprequest of msft's, then adopt by others.

deploy it in the web is the second thing. everybody can do that. msft has the biggest data centers that dwarfs google to the hell.

2008 Oct 29 02:20 PM

[Urbane Gori...:]

Not sure who it hurts. I do suspect that as long as you can email a spreadsheet, or document, that the online sharing is not really of great import to most people. I prefer standalone programs. They run faster.

On another note, though, I was just playing around with Google Spreadsheet because it does one thing that no other spreadsheet (or document ) seems to be able to do. That is to pull live data from the web,

You can build some amazing stock market spreadsheets and link the cells to various aspects of a stock, such as its open, close, p/e, volume etc... very simply. Then by dragging the cells down, you can update the info for a series of other stock tickers. Pretty slick!

jegan ;-)

2008 Oct 29 02:35 PM