Summary
1. Will Microsoft's launch of a web-based office suite undermine their current office products?
2. Does Microsoft know how to deliver web applications?
3. Can Google reach the enterprise?
Analysis
It looks like the future battles between Microsoft and Google are going to be wide ranging. Recent announcements by Google to develop an operating system as well as a cell phone operating system were targeted directly at Microsoft. Microsoft's answer to create their own web-based office suite is directed right at Google.
The real question is can Google gain traction in the enterprise with their web-applications and can Microsoft still make money if corporations switch to web-based office solutions?
The real question for these battles are who will be the new customers for these products and who will be the best to reach these customers. Let's first look at Microsoft.
Microsoft can develop the software. But can they sell it. How will they price it and how will they train the sales force that is used to great commission from Microsoft office to go to CIO's on Monday and tell them they should include the lower cost option of web-based office for a portion of their employees? Or what is the marketing message that Microsoft will produce so that it will be clear for the existing customers how to use Microsoft products and which use cases are good for local install office vs. web-based office. This does not sound easy. If Microsoft leaves it up to customers to decide, then there is a 50-50 chance they could choose Google.
Now, let's look at Google. Can they ride the wave of "if its on the web, it must be better"? Can Google convince the CIO's that switching from status quo (Microsoft) will not get them fired? Who is actually going to sell it to the IT department? Where are the companion products that the IT industry will want? What is their global rollout strategy for IT organizations who want to adopt this solution? The good news / bad news is that there are some CIO's who are switching to Google mail and leaving Microsoft Exchange. But so far, this is a company by company decision and each decision is very independent of the others. There are very few consultants who can help companies make these changes. There are many more consulting companies that know how to implement Microsoft products.
So, you can see when you lay out the challenges to either company it feels like we have a way to go before we will see how the battle will take shape. One thing is true, the stakes of the battle are very high for both companies. The good news for IT and other consumers is that this competition will drive innovation in a market that has been rather tame.
Cliff Bell consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
