Microsoft Office 2010 Faces Google Apps, Economy

Microsoft will launch Office 2010 and SharePoint 2010 May 12, making the productivity suite immediately available to businesses, roughly a month before consumers. While Microsoft hopes that Office 2010 will allow it to command the productivity-software segment, the company faces challenges in two areas: cloud-based productivity apps such as Google Apps, which are drawing the attention of both consumers and businesses, and depressed business spending, which has affected uptake of Microsoft's other recent flagship product, Windows 7. Microsoft will doubtlessly offer a full-court press in an attempt to disseminate Office 2010 to as many consumers and businesses as possible.

Microsoft will launch Office 2010 and SharePoint 2010 May 12, offering the platforms to businesses roughly a month before consumers. With that release, Microsoft hopes to maintain its dominant market share in the productivity segment despite upcoming challenges from cloud-based applications such as Google Apps.

Microsoft originally released the beta versions of Office 2010, SharePoint Server 2010, Project 2010, Visio 2010, Office Mobile 2010 and Office Web Apps at the Professional Developers Conference in November 2009. As with its ramp-up to Windows 7, the company expected that a wide beta test involving millions of users would help it tweak and improve the platform before launch.

Unlike Windows 7, which needed to decisively eliminate the stigma associated with the much-maligned Windows Vista, Office 2010 will be released without the burden of needing to eclipse a previous edition in the series. That's only part of the equation, however; just as Windows 7 needed to convince users of the aging-but-stable Windows XP that they needed to upgrade to an entirely new operating system, Office will succeed only if its new features can pull attention away from older versions of the productivity suite, which many consumers and business users may decide are perfectly adequate for their daily tasks.

To that end, Office 2010 contains a wide variety of tweaks and improvements, including sidebar enhancements to Word 2010 and upgrades to Excel 2010's PivotTable and PivotChart. The most radical change for the traditionally desktop-bound software, though, is the cloud-based component: Windows Live users will be able to access stripped-down editions of OneNote, Excel, Word and PowerPoint via their browser, with a number of features restricted to the full, purchasable version.

That cloud component is seemingly tailor-made to counteract a challenge from Google Apps, an online productivity suite that has found adherents among both consumers and businesses. Google announced on March 5 that it had acquired DocVerse, an application that allows groups to collaborate online on Microsoft Word, Excel and PowerPoint documents; Google will likely integrate its new acquisition's technology into Google Apps to increase its appeal to corporate users.

"The difference in our platform is simplicity," Jonathan Rochelle, product manager for Google Docs and Sites, said during an interview with eWEEK. Alluding to Microsoft's simultaneous desktop- and cloud-based Office offerings, he said: "I really, truly believe that the complexity of what you need from that set of tools ... is going to be difficult for consumers and businesses."

Office will need to make the argument that the combination of desktop and cloud will offer users more versatility as opposed to complexity.

The other factor likely influencing Office's marketplace adoption is the economy. Last quarter, Microsoft's Business Division reported revenues of $4.2 billion, down year-over-year from the same quarter in 2009. That represented a marked contrast to the financial gains in Microsoft's other verticals, including its Windows & Windows Live Division, Server and Tools, Online Services Division, and Entertainment and Devices Division.

Business spending has only just started to revive after several quarters of global recession. "Business customers are beginning to refresh their desktops and the momentum of Windows 7 continues to be strong," Kevin Turner, Microsoft's chief operating officer, wrote in an April 22 statement linked to the quarterly revenue report. Microsoft's strong sales of Windows 7, which has sold 90 million licenses since its October 2009 release, have largely come from the consumer side. If business spending remains slow to revive, it could harm short- to mid-term uptake of Office 2010 within both SMBs (small to midsize businesses) and the enterprise.

How these factors affect Office 2010's fortunes, of course, will be decided long after May 12. But trust Microsoft to throw its full financial weight behind what's arguably its highest-profile product of the summer.