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MOUNTAIN VIEW, Calif.—Microsoft Corp. plans to spend more than $3 billion over the next three years on its Office productivity suite and hopes to double annual revenue from Office to $20 billion by 2010.
“I have a $20 billion dream for Office, but the product will be so much more than what we think of today. There will be new categories of application value from a client standpoint, as well as around servers and XML services.
“We can create enough value for this business to grow 10 percent a year over the next 10 years, giving us some $10 billion annually in revenue growth, alone, at the end of that time,” said Jeff Raikes, Microsofts group vice president of productivity and business services, in a presentation at Microsofts campus here on Monday afternoon.
Small-to-medium sized businesses are currently underserved with business applications, relatively compared to the large business market, he said. “This decade will see people demanding that they are able to interact electronically with all businesses, so my goal with the Great Plains and Navision acquisitions is to offer far more than just great accounting software.
“I want to offer great value for SMBs when they move onto the Internet and help them work better with their partners, and I see that market and that demand boosting our business around that to $10 billion a year,” Raikes said.
Raikes also expects to see another wave of value around information work in the next decade that will significantly outpace the enormous growth of the past two decades.
“We have seen major waves of value in information work over past two decades, from the creation of spreadsheets and word processors in the early 1980s to the integration of digital tools for creating content in the 1990s based around a graphical user interface,” he said.
But there are many challenges today, involving connecting people, software and services. There are many disconnected islands of data, problems with becoming connected to business processes and inefficient collaboration, said Raikes.
Over the next decade, Microsoft will use three pillars to drive its information productivity business forward: It will serve a broader customer audience, create new customer value through innovation and help customers realize business value, Raikes said.
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: Microsoft to Pour $3 Billion Into Office”>
Raikes said another “challenge and opportunity the industry faces” is to broaden the definition of information worker from “knowledge worker” to include any worker who is an active participant in a business information process, to anyone who uses digital or software tools as part of their daily work.
Managing the process of tasks and taking action is also very underserved today, Raikes said, adding that while Microsofts thinking was currently “rather rudimentary” on the task-and-decision process front, “we need to find out the common essence of sharing the right information that leads to the insights and the decision-making.”
New customer value will be unleashed through greater access and improved collaboration, including meeting facilitation, tele-meetings, note-taking and application sharing.
Authoring improvements through things like handwriting, indexing and categorizing, as well as the ability to use speech-and-voice recognition in conjunction with ink-and-pen recognition—and bringing all this together in the user interface and across applications and devices—is a huge area of opportunity going forward, he said.
Raikes said that Microsoft is also working on tools to help people optimize their time usage. “How do you get the tools people commonly use connected to those disconnected islands of data and make this available to the masses? Our Microsoft Data Analyzer tool, released a year ago, is a beginning on this road, and one on which were rapidly moving forward,” he said.
Time-to-competence is also a key business challenge, he said. “The next version of Microsofts SharePoint Team Services software will have an increased number of templates to help” employees in new roles get up to speed as rapidly as possible, he said.
Time-to-responsiveness is also very important, and new form factors that allow information to follow users wherever they go and across all their devices are vital, Raikes said, demonstrating some of the technologies found in the upcoming Tablet PC, which launches on November 7.
Talking up the pervasive ink technology and note-taking ability of the Tablet as critical to addressing time issues, Raikes said these features allow notes to be handwritten on the screen, stored and searched. E-mails, planners and calendars could also all be rendered in ink and made searchable, he said.
“This is a metaphor where paper converges with screen. Imagine the opportunities that cannibalizing the analog form and opening up that value proposition creates. This is going to be a very rich decade for information.
“Weve made significant enhancements in Outlook 11 to help reduce e-mail glut in the Inbox and have introduced a smart search facility. The next decade will be characterized by the connection between devices, software and platforms,” Raikes said.
The use of Contact lists also needs to pervade the platform, he said, as users do not want numerous Contact Lists. “This is one of the core principles of the work in [the next-version of Windows code-named] Longhorn. This is also true for the buddy list and Instant Messaging,” he said.
Microsoft also faces challenges around voice recognition and getting the technology to work seamlessly. Educating users around this and building it into the user interface more comprehensively are challenges that lay ahead. “You will also see a lot more work on inking and handwriting recognition going forward, in Longhorn and beyond,” Raikes concluded.
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