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Microsoft Office contributes heavily to Microsoft’s bottom line. It’s also one of the key services that the enterprise clings to in day-to-day operations. And with Microsoft Office 2010 right around the corner, Microsoft is poised to capitalize once again on those that want to deploy the newest and most capable versions of the program. Simply put, Office has become a software juggernaut for Microsoft, and the company is reaping the reward.
But what Office’s future holds is uncertain. The tech industry is changing. The needs of both consumers and enterprise customers just aren’t the same as they were even a few years ago. And although Office 2010 is likely to be successful, future iterations of the software might not enjoy such success. With companies like Google attempting to make moves against Office, it’s entirely possible that Microsoft’s customers will look elsewhere for their productivity needs. If they do, the results could be disastrous for the software giant.
Microsoft Office’s future is uncertain. Let’s find out why.
1. Google acquisitions
When Google acquired DocVerse last week, it sent shockwaves through the space. What does the company have planned with DocVerse that will help it compete with Office? At this point, we don’t know. But this year has shown so far that Google is committed to acquiring small companies to improve its suite of products. If that trend continues, the company might swallow up more firms that could directly impact Office market share.
2. Google Docs
Google Docs is an extremely important factor in determining the future success of Microsoft Office. Currently, Google’s online tool is underpowered when compared with Office. But how long it will stay that way is unknown. Google Docs is a free service that suits the needs of those who don’t require elaborate presentations or major, complex spreadsheets. Plus, it’s Web-based. If Google adds more advanced features, Microsoft might be in for trouble.
3. Moving to the cloud
More and more people are moving to the cloud to perform tasks. That’s a problem for Office. Granted, Microsoft has said on numerous occasions that it plans to keep up with the market and increasingly rely on the cloud, but moving such a powerful service to the Web will be difficult. Perhaps that’s why its current Web-based product is underpowered when compared with its desktop alternative. As more folks move to the Web for productivity tools, Microsoft might be left behind.
4. Windows plays a part
Windows is extremely important to the future success of Office. Most people associate Microsoft products to Windows. When Windows Vista was ruining Microsoft’s reputation, some customers lost a measure of confidence in the company. Now that Windows 7 is doing well, some of those people have come back to Redmond. Microsoft needs to ensure that Windows stays appealing to customers. If it doesn’t, it could negatively affect Office sales.
Microsoft Needs to Keep an Eye on the Competition
5. The enterprise is changing
For years, Microsoft has relied on the corporate world to turn a profit. But the enterprise is changing at a rapid rate, and more companies than ever are looking toward the cloud to operate their businesses. When that happens, they enter Google’s domain. And if they don’t require all the power that Office offers, why should they pay for Microsoft’s service when they can get access to Google Docs for free? It’s a question that Microsoft will need to answer.
6. The competition won’t stand still
More often than not, the argument in support of Office relies upon its power. Microsoft’s suite of tools allows users to do more than any of the competition. But we can’t forget that many of the functions built into Excel and PowerPoint aren’t so outstanding that they can’t be improved upon. Competing products could catch up if they are willing to spend the time and money.
7. Other competition
The attention in the Office market inevitably turns to Microsoft and Google. But we can’t forget that there are several other companies out there trying to win over a new generation of office workers. Apple offers iWork. OpenOffice is an extremely useful tool. Even Zoho, a Web-based productivity suite, is worth considering when examining the future of Office. Microsoft has several competitors out there. And each of them wants to chip away at Office’s user base.
8. Cost plays a role
Office is expensive. For years, that hasn’t mattered, since it was the only viable productivity suite on the market. But today, there are several free alternatives that can deliver a worthwhile experience. How Microsoft plans to compete with free is anyone’s guess. After all, the company has thrown bundles of cash into each new iteration of its software, and it simply doesn’t have the luxury of offering it for free. Microsoft needs to find a viable strategy to compete with free services or Office could be in trouble.
9. Customer desire changes
As any company in the tech business knows, customer desire changes at a rapid rate. We’re seeing a major change right now from desktop-based reliance to a more Web-based focus. As a company that has catered to the desktop, that’s a problem for Microsoft. The company has the money to stick with customers wherever they go, but it needs to have the vision to do it. As customers continue to change opinions, Microsoft needs to be ready to meet new challenges.
10. Microsoft’s focus
Microsoft might be taking Office for granted as it focuses on other, more challenging sides of its business. In recent months, Microsoft has doubled down on its focus on Google. The company is extremely worried that the search giant will corner the Web-advertising business and ensure that as more services move to the Web, Microsoft’s influence is diminished. I get that. But Microsoft still needs to work hard on Office to ensure it doesn’t get left behind. Office is still extremely important to its bottom line. The longer it focuses on Google and the less it worries about Office, the more trouble it might have maintaining its current standing in the space.