Zoho Unafraid of Microsoft Office 2010

By Clint Boulton  |  Posted 2010-05-14

Zoho Sees Microsoft Office 2010 Challenged by Componentization of Cloud Apps

With all of the smack-talking and chest-bumping going on between Google's enterprise team and Microsoft's Office group, it's easy to forget about other cloud computing vendors who may be affected by Microsoft's launch of Office 2010 May 12.

Office 2010 includes Office Web Apps, a cloud computing-based component of its productivity software suite designed to challenge Google's own Docs document, spreadsheet and presentation applications. Office Web Apps includes Web-based editions of Microsoft OneNote, Excel, Word and PowerPoint which Microsoft users can access through their browser.

While Microsoft and Google continue to gouge each other with japes and customer wins, startups such as Zoho sneak in to lure small and midsize businesses to their low-priced cloud computing apps.

Zoho offers both Web-based collaboration apps such as Zoho Writer, Zoho Mail and Zoho Sheet, but the company also makes enterprise apps, such as Zoho CRM. 

Zoho Product Evangelist Raju Vegnesa harbors no illusions about Zoho's inferior market position to the Microsoft Office and Google Apps giants. The company has 3 million users using Zoho apps, compared to 30 million Google Apps users and 500 million-plus Office seats. 

Vegnesa believes the office apps game is changing, metamorphosing into something else. He pointed to the market evolution of the telephone to mobile phones in the telecommunications market as an analogy. While analysts criticized the move to mobile phones, it's clearly worked out for carriers, with users spending more time on mobile phones than landlines.

Another example is the migration of music from the boombox to digitization on the desktop, on to mobile devices such as Apple's popular iPod, and then finally into mobile phones and other Swiss Army knife-like devices that do several things for consumers.

Vegnesa sees this same "componentization" happening in the collaboration market, with Office suites evolving from desktop application suites to online application suites.

Zoho Unafraid of Microsoft Office 2010

"I'd compare MS Office to that old desktop music player," he noted, fleshing out this idea in a blog post and taking a swipe at the software giant. "Web apps like Zoho and Google add portability plus a lot more which can be compared to portable music players. The next step: Office apps becoming components within other apps."

Just as music broke free from the desktop and MP3 players to find their way onto mobile phones, Zoho believes office content will be integrated within other business apps.

For example, users working on a project who want to create documents for that project must currently move from the project management program to the office productivity suite to create and edit documents. This "context switching" is time-consuming and largely untenable in today's fast-paced work environment. Yet users still do it.

"The inherent benefit of having office apps on the browser is that users can embed that anywhere," Vegnesa told eWEEK. "Users can be more productive when office applications become features in other apps."

Zoho has been regularly creating plug-ins and other tools to help users pull data from Microsoft's on-premise apps into the Zoho cloud context.

But as Forrester Research cited "tools not integrated into processes" as the biggest challenge for Microsoft Office, pointing to the lack of contextual integration in that suite.

Vegnesa believes that could be a stumbling block for the big Microsoft machine as it tries to move Office 2010 forward. Microsoft, he said, fears componentization because it has a $19 billion cash cow to protect.  

By contrast, Zoho integrates its office apps into its own business apps and opened the same APIs its uses internally to its partners. For example Central Desktop integrated Zoho's spreadsheet application into their collaboration app. The spreadsheet section is served by Zoho, with the data coming from Central Desktop's servers.

Still, that same Forrester Research piece acknowledges that unseating Microsoft now that Office 2010 has a cloud computing component will be a most difficult task for challengers such as Google Apps and Zoho. The researcher said only 3 percent of 115 large and SMB shops surveyed said they use Zoho.

That's OK for Zoho. Vegnesa told eWEEK this cloud computing market won't be decided in a year or two. Zoho is in it for the long haul.


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