More Services, Software On the Web

By Peter Galli  |  Posted 2007-10-05

More Services, Software On the Web

Major technology vendors are continuing to push initiatives to bring collaboration tools online, fueled by equal parts customer demand and competition from rivals.

Moves by Microsoft and AT&T illustrate efforts by established tech companies to carve out space in the market contested by major vendors such as IBM and relative newcomers such as Google.

Microsoft, of Redmond, Wash., is ratcheting up its software-plus-services strategy with an offering known as Office Live Workspace that is due later this year and will let customers access, share and collaborate on documents online. But there is a catch: Users will not be able to edit the documents they are viewing through a browser unless they have Office installed on their computer.

"You need Microsoft Office to edit Office documents, but if you do not have it installed you can view Office documents in a browser [both Internet Explorer and Firefox will be supported] and can comment on them," a Microsoft spokesperson told eWeek Sept. 30.

For users who do have Office on their machine, when they click to edit a document, it will be downloaded into the version of Office they have on the desktop—Office 2003 and Office 2007 are supported. When changes are made and the document is saved, the changes are automatically saved to the online version of the document, the spokesperson said.

The service will be available at no charge when released later this year, and the software maker is accepting registrations from customers who want to help test the beta. While Office Live Workspace initially will not include advertising, the plan is to do so at a later stage. The company is also testing different designs and may also offer additional features or services for a price at some point, the spokesperson said.

The Office Live Workspace offering is yet another indication of how seriously Microsoft is taking the growing competition in the productivity space as well as the threats posed to its traditional business model by online competitors such as Google, with its Documents and Spreadsheets offerings. IBM has also announced Lotus Symphony, a suite of free software tools for creating and sharing documents, spreadsheets and presentations.

Microsoft is initially offering three online services—Exchange Online, Office SharePoint Online and Office Communications Online—to enterprises with 5,000 or more seats.

"This new era of connected computing is about empowering people and businesses to balance the power of the Internet with the rich interactivity and high performance of client and server software," said Jeff Raikes, president of the Microsoft Business Division. "With todays announcements, we are taking a significant step forward by combining our deep client and server software experience with our strong commitment to delivering flexible services offerings for our wide variety of customers and their unique needs."

When asked if Office Live Workspace was a response to the growing threats in the online productivity space, the Microsoft spokesperson said that it was "created to enable Office users to access their information anywhere and share their work with others, whether at home, work and school."

The existing Office Live offering will be rebranded Office Live Small Business, a change announced by Microsoft CEO Steve Ballmer at the companys Worldwide Partner Conference in July.

Microsoft is also now differentiating between the "Live" services targeted at individuals, business users and virtual workgroups and the "online" services that live in its data centers and that are geared toward large organizations with more advanced IT needs.

The online offerings from Microsoft are one of the three ways customers can get their software; the others are by buying and hosting the software themselves on-premises or through the hosted services available from Microsofts partners.

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For its part, AT&T, of San Antonio, is buying Internet-based conferencing and collaboration software provider Interwise for $121 million and with it a bigger play in the video, Web conferencing and collaboration race against rivals Sprint Nextel, Verizon and Cisco Systems.

AT&T announced the acquisition of Interwise Oct. 1. Interwise offers VOIP (voice over IP), Web and videoconferencing services for both on-premises and hosted deployment, along with a hybrid of on-site and hosted services. AT&T said it will offer these services alongside its own networking, VOIP, conferencing and collaboration services, as well as its MPLS (Multiprotocol Label Switching)-based IP network for businesses.

There is no shortage of market opportunity for such services, which businesses often use in conjunction with e-mail, instant messaging, presence and other collaboration tools to help their employees work together on tasks. Research company Frost & Sullivan said the market for audio, Web and videoconferencing will be worth $5.9 billion through 2007, with growth continuing into 2008.

The added utilities will help AT&T better reach the lucrative market opportunity selling into enterprises that the phone companies and other technology providers crave. Sprint Nextel and Verizon are also offering audio, Web and video­conferencing for their business customers.

"Were really excited about having Interwise as part of the company because they are one of the only ones to offer premise[s]-based collaboration, network-based collaboration or a hybrid solution," allowing users to collaborate across both environments, said Steve Sobolevitch, AT&Ts vice president of business development.

IDC analyst Robert Mahowald said the deal is a step up for AT&Ts enterprise business, which has strong, hosted audio conferencing but lacks on-premises services and has relied on reseller agreements for Web conferencing to this point.

"As they try to grow their enterprise business larger and larger toward [broader] Web collaboration, this gives them a development platform," Mahowald told eWeek. "It gives them some customers, but it also gives them a platform that they can actually play with as opposed to Microsofts or Ciscos, which they were just reselling."

To be sure, phone companies are far from the only technology providers interested in Web collaboration. Microsoft and IBM have been carving out such packages through their SharePoint and Lotus portfolios, respectively, as part of broader unified communications strategies. Adobe Systems and Citrix Systems also play in the Web conferencing space.

Cisco, of San Jose, Calif., lent spirit to the hunt in March with its bid to buy WebEx for $2.9 billion. But most acquisitions in this space are fill-in-the-gap deals, such as IBMs Aug. 22 deal to buy on-demand Web conferencing software maker WebDialogs.

"The way these independent companies are flying off the shelves, I dont even know whos left to buy," Mahowald said.

Should the deal close in the fourth quarter as AT&T expects, Interwise will operate as a business unit within AT&Ts $35 billion Global Business Services group, which is led by Group President Ronald E. Spears.

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