Forbes recently published a blog post concluding that Microsoft will win the cloud war because of Microsoft Office. I believe they got it right. One thing I have learned over the years is never, ever, ever underestimate inertia in the marketplace when it comes to installed software and hardware. Rule two is “you have underestimated the inertia”.
A few years ago I was doing an IIS training on premise for a major insurance company. The web techs were telling me about the IIS servers they were about to upgrade. However there was one that hadn’t been updated in 8 years – an NT4 server running IIS 4. They didn’t dare touch it. It was running, working and making over a million dollars a month.
In another case, I was doing database consulting for Hawaiian based flower wholesaler. They had an application running on MS-DOS that cranked out federal express shipping labels for all their orders. It was of course a mission critical app for them (next to organ transplants, cut flowers shipping overnight is the very definition of a time sensitive business) and they had no interest at all in updating it. What I learned from these and other field experiences, and market research bears this out, is that you can have an snazzy new application or operating system with a ton of bells and whistles – but businesses won’t upgrade until they replace the hardware, can’t get support, or have some other external constraint that drives them to lay down the dollars. Faster, better, and more secure in and it itself just doesn’t do it.
Same thing for cloud services. Businesses want the cloud, but not a new way to do things. Interruption of business routines really matters to a business. We are after all creatures of habit and having a filing system where you know that paid invoices go in the purple folder and gets moved to Nancy’s desk on Tuesdays, each and every tues. - is a functioning workflow. Interrupting that workflow cost money. Simillarly, learning an entirely new way to create and process office documents just isn’t going to happen in big way, worldwide, just so people can move to the cloud. It has a real, non-trivial costs. Microsoft clearly wins here. And though Microsoft has recently backed off of the Software PLUS Services story – in the end, that is what wins the day.
The weakness of the Cloud is the presentation layer. [I often refer to World of Warcraft as proof that smart clients is the way to go for creating a rich front end for a cloud service.] The browser simply was never intended to host complex, interactive applications. It really is that simple. Like Microsoft developing cloud applications, I would wager an iPhone that over at Google they are working on smart clients that work with Google Apps like Office works with Office 365/BPOS. They don’t have a choice really as the browser just can’t do what Office can do. I can hear the rebuttal “but who needs all those features” and I put up no argument about that. There should be an Office Lite for $99. But let’s be real about this, Office has some really cool capabilities that really improve productivity such as imbedding a PowerPoint slide in an Word Document. Then when you update the PowerPoint, it’s automatically updated in Word. (Same for imbedding Excel and Viso). AND that slide can be hosted on a SharePoint site. Sweeet. Not to mention publishing SharePoint document libraries into Outlook at the click of button, and the SharePoint Workspace keeps your local system synchronized with SharePoint workspaces. These and other features are built into Office and work automatically with SharePoint. No special add ons required.
Microsoft realizes this is their trump card. After all, they changed the name from the absurd Business Productivity Online Suite to “Office 365” (not yet released). The key point here that Microsoft has refocused – instead of the focus being “online” , it’s about Office. “Keep using what you know” is all over the marketing materials for Office 365 – and rightly so. And to wrap it up with a neat bow, users will be able to subscribe to the high end Office Professional Plus suite for a monthly fee, making the costs of having the latest version of Office known and manageable for businesses large and small. No big up front fee and no need to manage key distribution servers or distribute product keys. Easy breezy.
Just about the only thing in the way is Microsoft itself. They caught the ball and have a clear field to the end zone. As long as they don’t fumble….