Office 2010, the latest version of Microsoft’s hugely profitable Microsoft Office productivity suite, will begin shipping to business customers early next month. Its arrival will be an important test for the software colossus as it adapts to an increasingly Web-focused software landscape.
That’s because at the same time, Microsoft will also offer free, ad-supported Web versions of Office applications. The Web versions are Microsoft’s attempt to fend off a growing number of free Web-based office apps, including Google Docs and Zoho. (The regular versions of Office 2010 will cost between $99 and $499, and those who buy these versions will also have access to more complete Web versions of the apps).
The threat to Microsoft from these Web-based apps has intensified as a handful of organizations, including the Los Angeles city government and Genetech, have adopted enterprise versions of Google Docs alongside Microsoft’s software. In a report released by IDC in September 2009, some 20 percent of business users said Google Docs is in widespread use at their companies–up from less than 6 percent 18 months earlier. IDC expects this figure reach 27 percent this year, which could spell trouble for Microsoft, which gets as much as 60 percent of its profits from Office, if it means users are turning away from its software.
Office 2010 brings with it Office Web Apps, which includes Web versions of Word, Excel, PowerPoint, and OneNote. Microsoft is positioning the software as a complement to the regular version of Office and focusing on compatibility with its existing software as a key selling point. Office Web Apps will let users create and save documents that look exactly the same when opened with the regular versions of those applications.
Microsoft’s Kurt DelBene, senior vice president of Office Business Productivity, says the company’s number one focus in developing Office Web Apps was making sure that files look and behave the same both offline and online in Internet Explorer, Firefox, and Safari browsers (DelBene says Microsoft has not seen enough demand for Google’s Chrome browser to support it), as well as on Web-enabled mobile phones.
DelBene adds that most business users don’t create documents on the Web, so when they move documents from the desktop to a cloud application, this typically results in formatting errors. This is an issue that Google is also keen to address. In March, the company acquired DocVerse, a startup whose software lets people collaboratively work on Word, Excel, and PowerPoint documents in the cloud. DocVerse’s founders posted on their blog that “our first step will be to combine DocVerse with Google Apps to create a bridge between Microsoft Office and Google Apps.”