New products from those companies are cheaper, delivered as a service, more collaborative, or more open than Microsoft's Office apps--in some cases, all of the above. Sounds promising until you realize what they're up against: IDC puts Office's market share at around 95%. "They've been the only option for so long, culturally it's hard to make a switch," says Bethann Pepoli, deputy CIO for the Commonwealth of Massachusetts. The state was an early advocate of the Open Document Format--an alternative to Microsoft's OpenXML--yet 90% of state employees still use Office.
Google added a free, collaborative presentations application to its Google Docs online productivity suite. Yahoo bought Zimbra, developer of an Ajax-based collaboration suite, for $350 million.
IBM launched a free, downloadable personal productivity application suite, called Symphony, for Windows and Linux--and eventually for Mac OS X--that includes a word processor, spreadsheet, and presentation software. The tools also are available as part of Lotus Notes 8. Symphony, however, isn't available as a hosted service, nor does it leverage Notes' collaboration features, though Douglas Heintzman, director of strategy for IBM's collaboration technologies, hints that could come later.
Symphony puts more weight behind OpenOffice and the Open Document Format, of which IBM has been one of the biggest supporters. An updated version of OpenOffice was released last week, too. Free productivity suites have been touted for years as an alternative to Office, with little success, despite the backing of IBM, Sun Microsystems, and others.
Microsoft Office, in contrast, is a cash cow, with more than 71 million licenses sold in fiscal 2007. Microsoft last week issued a service pack for Office 2003 (the third since the product's release) and provided a preview of the upcoming Office for Mac 2008. Microsoft's OpenXML document formats recently failed in a first round of voting at the International Organization for Standardization, but the company remains publicly confident that once it addresses issues raised during the vote, OpenXML will become a standard in the next round of voting early next year.
Life Brokerage Partners, a life insurance brokerage firm with 70-plus employees, tried migrating away from Microsoft Office to OpenOffice, but recently came back. Why? Life Brokerage couldn't shake its dependence on Excel spreadsheets, and its partners and clients continued to use Microsoft Office. Even though OpenOffice can save files in Office formats, employees would forget to do so, resulting in complaints and resends. What's more, there was a learning curve with OpenOffice, and software glitches were tougher to resolve since support was relatively lacking compared with Microsoft.
"At the end of the day, taking users away from Microsoft is a daunting task," says Forrester Research analyst Rob Koplowitz.
Microsoft's glaring weakness is that its desktop apps are just that--available only on PCs and laptops. Microsoft doesn't have an answer to Google Docs. Office Live is the name given to hosted services for small businesses, not Web apps for a broad audience. And the collaboration features that do work with Office are a function of SharePoint Server and Communications Server, not the Office applications themselves.
Presumably, it's only a matter of time before Microsoft comes out with online productivity apps of its own. Until it does, however, the up-and-coming alternatives can do some things Microsoft Office can't.