While Microsoft faces a host of challenges in maintaining its market share numbers and persuading customers to upgrade to its 2007 Office System suite of products when released in the second half of this year, its competitors face an equally daunting task of winning users away from Office 2007 and growing their numbers.
Heading the list of challenges facing Microsoft is the fact that Office 2007 has a new user interface, which could require extensive staff retraining at a significant cost, as well as a new file format, which has the potential to create compatibility issues, analysts such as Joe Wilcox of Jupiter Research, told eWEEK.
“When you introduce something new, it disrupts, and this increases things like help desk costs and employee downtime,” Wilcox said. “So, to get to the benefits that come with this, they have to get past whatever retraining will be needed around the new user interface and any hardships around the new file format, which are always disruptive. These are two big hurdles Microsoft has to get around.”
Enterprise customers such as Robert Rosen, CIO for the National Institute of Arthritis and Musculoskeletal and Skin Diseases and an eWEEK Corporate Partner, agree. The new user interface and file formats pose “major concerns and will slow up adoption significantly,” Rosen said. “Since we dont know enough about the benefits of Office 2007, we have not yet developed any plans to move forward.”
But Chris Schneider, senior marketing manager for Microsofts Information Worker Product Management Group, told eWEEK that the Redmond, Wash., software maker is hearing differently.
Its customer research and the user data received from its technical beta program indicate that the learning curve for the new user interface is small, “so we dont anticipate an impact to peoples productivity,” he said. “That aside, we know that user training is an important issue for IT folks, and were going to provide lots of new kinds of training, such as giving IT people customizable training materials.”
Backward compatibility is the No. 1 priority in designing the new Microsoft Office Open XML file formats, which will make it easier for people to access data regardless of what programs they might be using, he said.
An increasing number of enterprises are also looking at who on their staff actually needs suites like Office 2007 and who could be well-served by alternatives such as Sun Microsystems branded StarOffice and the OpenOffice.org Projects free OpenOffice.org distribution, according to Kyle McNabb, an analyst with Forrester Research.
Ed Benincasa, a vice president at FN Manufacturing in Columbia, S.C., and an eWEEK Corporate Partner, is one such enterprise customer. His company has been heavily involved in the evaluation of OpenOffice and, more recently, ThinkFree.
“We believe that we will find a combination of product that will meet business needs at the most effective cost,” he said. “Since we are moving some functions to Linux, we have to find an alternative to Microsoft Office. We have already deployed OpenOffice in a limited production environment.”
Another major obstacle confronting Microsoft is persuading users to upgrade to Office 2007. That is evidenced by user reluctance to upgrade to Office 2003 from Office XP and even Office 2000. The same could well apply with Office 2007, McNabb noted.
“Even though Office 2007 is very innovative and a compelling solution, it is a big endeavor for enterprises to undertake, and many of them are going to sit on the sidelines in 2007 and wait and see and learn from others experiences,” McNabb said.
But Microsofts Schneider disagrees, telling eWEEK that “while we would agree that our biggest rival is ourselves, were seeing strong traction of Office 2003 among customers across all the segments we track. … The interest were seeing from customers in Office 2007 is reinforcing to us that it will be the biggest, most significant version of Office weve delivered in a decade due to all the innovations were introducing.”
But while many customers might not be upgrading, getting them to ditch Office altogether will be no easy task. Tom Miller, IT director for Fox Hollow Technologies, in Redwood City, Calif., and also an eWEEK Corporate Partner, said that while the company has a program to look at alternatives, it factors issues like time, resources and compatibility into its examination of any possible migration to another solution. So far it has decided to stay with Office.
However, Jupiter Researchs Wilcox told eWEEK that if there were ever an opportunity for StarOffice and OpenOffice.org, “this might be it, going head-to-head against Office 2007, because we have a new file format and a new user interface, which means a lot of extra cost,” and which could torpedo many enterprises from upgrading.
In addition, a lot of Software Assurance contracts are expiring between now and the end of July, and Microsoft will be aggressively beating the sales drum. Those businesses might well be looking at their alternatives and options before signing a new contract, he said.
Forresters McNabb, however, feels it is not Sun that has the most to benefit from this potential opportunity, but rather IBM with its Workplace Managed Client.
This solution offers customers greater desktop productivity as a service and removes the issue of managing individual desktop images. “This is more of an innovative alternative to what you can get from Microsoft, which is innovating with the end user in mind,” he said.
FN Manufacturings Benincasa would like to see a good, robust server-based office application, and ran an eWEEK lab for ThinkFree, which is server-based and cross-platform.
“The time savings for server automatic deployment and updates will be tremendous. We do not expect that a server-based application will meet all needs, but, it should meet most. We are also beginning deployment of Linux terminal services as a way to reduce individual desktop costs,” he said.
Other enterprise customers like Rosen are also interested in the IBM Managed Client, but he admits that it would be hard to change because of his companys strong history with Office.
“But I am still tracking it and may use it in pilots,” Rosen said. “Compatibility is critical, since we receive so many documents from outside sources. We also have a Microsoft Enterprise license, so there is also not a big motive to move to OpenOffice or StarOffice.”
Having played with OpenOffice, the incompatibilities and interface differences were sufficient that the cost to change would be significant, he said, adding though that how this plays out with Office 2007 remains to be seen.
If IBM had a really robust workplace client and Sun an innovative offering that included an e-mail client and better collaboration support, even more of Microsofts market share could be eroded, but “those alternatives just dont exist at this point,” McNabb said.
Part of Microsofts problem is that it is introducing a lot of new software at the same time. “Not only is there the new Office environment, but also Windows Vista, which is a lot for IT organizations to absorb and may cause some to switch gears,” he said.
One such customer, FN Manufacturing, has no plans to upgrade to Vista and Office at the same time, preferring to wait until the company has some production experience under its belt, Benincasa said.
But Microsofts Schneider points out that while the greatest value in the 2007 Office system release will be derived by using the products on Windows Vista, they would also run great on Windows XP SP1.