Should Google worry about Microsoft’s Office 2010 on-demand?

Microsoft’s announcement that Office 2010 will include free on-demand versions of its core applications Word, Excel and PowerPoint for consumers is a signal for Google to step up its flagging cloud computing initiatives, according to a Canadian tech analyst.

The Redmond, Wash-based software maker’s move to offer free cloud-based productivity apps – and later a fee version of the service for business – prepares Microsoft and its partners “to exploit larger cloud computing trends and produce more options for consumers and businesses,” said Tim Hickernell, lead analyst for Info-Tech research Group in London, Ont.

If Google fails to partner now with an influential on-demand app provider, Hickernell said, the search engine’s cloud computing efforts are likely to lose steam and fall behind. He said Google’s own on-demand app offerings are not enjoying much traction in the enterprise space. Google is also developing Chrome, an open-source operating system targeted at Internet-centric computers such as netbooks.

“Many will view this announcement as an attempt by Microsoft to catch up with Google. In reality it’s Google that’s constantly trying to catch up with Microsoft,” the Info-Tech analyst said.

“The majority of our enterprise clients have indicated that they are hesitant to migrate to Google Apps,” Hickernell said.

He said Google just doesn’t have the enterprise credibility enjoyed by Microsoft products. The open-app market space is further eaten up by the likes of OpenOffice and Virtual Desktop.

“Through a partnership with Google provides its online apps to Salesforce users. But recent reports indicating that Google Docs usage through this model has been very low,” Hickernell said.

Hickernell said other possible cloud partners for Google could be: IBM, SAP, as well as mid-market business software developers Sage Ltd., Infor and CDC Software.

Microsoft on Monday said it will offer a free but limited version of Office for the Web where users can access documents via a Web browser. It is scheduled to release the same time as the full, paid version of Office 2010.

Office 2010 will have real-time communications within a document that allows workers to see if colleagues working on a project are available online.

The paid version — pricing has not yet been announced — has features that go deeper into the collaboration realm.

Real-Time Communications within a Document


For instance, users will have a box listing the people who are currently editing a PowerPoint slide or Word Doc will pop up in Office 2010. By moving the mouse pointer over the name of a co-worker working on a project, a green light will signify if that worker is available online.

If the person is available, the system will allow the user to call or e-mail this person or set up a meeting.

This feature will also allow workers to find colleagues within the company directory who have specific skills and invite them to join the conversation.

The use of “unified communications” within Microsoft Office is an effort to bring more social networking features into the enterprise, something business users have been clamoring for as their personal use of sites like Facebook and Twitter spill over into their working lives.

Co-Authoring Projects


Office 2010 has a new feature that aims to keep workers in sync called “co-authoring.” Groups of workers can create slides, a spreadsheet or a Word document collaboratively.

Certain team members can create and edit certain slides of PowerPoint presentations or certain sections of a written proposal in Word. A small box in the lower left corner of a document will list who is currently editing. Once a worker saves changes to a document, co-workers can look at it and offer suggestions or approval.

Remote Access of Office Docs


With the free, Web-based version of Office, users will be able to retrieve Word, Excel and PowerPoint documents anywhere using a smartphone or with a non-work laptop using any browser, not just Internet Explorer.

The Web version of Office is limited in the sense that it won’t have all the fonts and formatting of the paid version, but users will be able to view and edit Office documents in a Web browser. This will come in handy for a worker rushing through an airport who wants to quickly check PowerPoint slides in a smartphone browser.

Office has long been the predominant productivity suite for enterprise and home-based users but the release of a collaborative platform is a “game changer,” according to Stephen Kearns of iMason Inc.

Office Web applications will offer the same user experience as the desktop version on a corporate server, said Shannon Ryan, of Ottawa-based Microsoft partner Non-Linear Creations Inc.

How Office 2010 will help Microsoft


The on-demand delivery method will enable Microsoft to attract a new segment of users such as those from developing nations, according to Hickernell.

It also offers Microsoft new revenue opportunities in selling advertisements and leveraging its new, targeted search engine, Bing.

In addition, Microsoft will be able to offer a seamless user experience across MS Office versions and across channels such as gaming platforms, netbooks and smartphones. Info-Tech Research Group also expects Microsoft to leverage the multi-tenant Office architecture developed for this offering to contextually embed productivity services into its Dynamics line of enterprise applications, as an alternative to desktop integration with a local copy of Office.

Why Office 2010 on-demand will be good for business

“While this product is geared towards consumers, businesses should watch it closely. Businesses should view Office-as-a-Service as an opportunity for hybrid deployments and for contextual integration with enterprise systems, rather than as a directly substitutable product,” Hickernell added.

For example, rather than providing “process-heavy workers” with auxiliary desktop-based word processing or spreadsheet applications for the occasional writing operations they do, IT managers can simply deploy Office 2010 on-demand for these employees.

This would be ideal for sales personnel who primarily use customer relations management (CRM) apps but also need Word to type up contracts or letters to their clients.

“With the on-demand method, businesses will save not so much in licensing fees as they would on IT administration and support,” said Hickernell.

The on-demand model is also ideal for mobile workers who might need light office productivity apps that won’t put much demand on their mobile devices.

(With files from Shane O’Neill and Dave Webb)

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