Linked by Thom Holwerda on Thu 8th Nov 2012 11:45 UTC
Microsoft "Last week I overheard two of the top Microsoft 'watchers' discuss the Office group having bet against Windows 8, presumably because Office 2013 is not fully a (set of) Metro (a.k.a., Windows Store) apps. Ok, as much as it pains me to defend Office I'm going to do so. I'm going to defend them because they are more right than wrong. Especially when you take a shareholder perspective. Not only will I defend what Office did for Windows 8, I'm going to defend some of their licensing decisions. Oh that should be fun." Insightful analysis of the current state of Office within the great context of Microsoft's current challenges. Written by Hal Berenson, former distinguished engineer and general manager at Microsoft.
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So what?
by PieterGen on Thu 8th Nov 2012 12:20 UTC
PieterGen
Member since:
2012-01-13

The article is not very convincing. In the first place, what do I (as a tech lover) care about the profitability of MSOffice. But apart from that, let's dissect the article:

A. ".. saturation of its traditional market for desktop productivity apps they have struggled to find ways to grow...response here has been to grow the Office suite, particularly through the creation of the Office Server products such as Sharepoint....."
My experience with Sharepoint is that only consultants like it, because it brings money. Users, when given the choice, prefer other software. It is overly complex and just a chore to work with.


B. "The second headwind has been the emergence of free, or extremely inexpensive, alternatives to Office. Response: A “Home and Student” edition.
Basically this is using the monopoly money to keep competitors out of the market. An illegal practice.


C. The third head-wind has been ....GMail and Google Apps Response: Office 365
Please compare Google Apps and Office 365. The first is limited but easy to use, the second is more feature rich but the usual Microsoft uber complex mess.

D. The fourth headwind has been the switch ... to informal communications such as email, instant messaging, and text messages. Microsoft has responded in numerous ways, from the addition of OneNote, to Lync.

DOes anybody actually USE Lync? And if it is so succesful, why does Microsoft kill it in favor of Skype? ;-)

Reply Score: 0

RE: So what?
by maethorechannen on Thu 8th Nov 2012 13:27 UTC in reply to "So what?"
maethorechannen Member since:
2009-09-03

DOes anybody actually USE Lync?

Yes, we use both Lync and Skype at work. Lync is used because you don't need to friend (or whatever term Skype uses) people in the organization to IM/call them. We use Skype because the call quality is miles better, though only with people we closely work with (because the friending thing is a bit of a pain).

And if it is so succesful, why does Microsoft kill it in favor of Skype

Last I heard, it was WLM that was getting killed, not Lync (though I wish they would make Lync a bit more Skype like, especially when it comes to call quality).

Reply Score: 2

RE: So what?
by darknexus on Thu 8th Nov 2012 16:41 UTC in reply to "So what?"
darknexus Member since:
2008-07-15

I agree with most of your points, except for this one:

B. "The second headwind has been the emergence of free, or extremely inexpensive, alternatives to Office. Response: A “Home and Student” edition.
Basically this is using the monopoly money to keep competitors out of the market. An illegal practice.

While the first bit is valid, the second part is pure bullshit. It is not an illegal practice to offer a version of your product, at a cheaper rate, for various purposes. Educational discounts are not illegal. Period. Monopoly, in this particular instance, doesn't even enter into it. And, would you look at that? Despite your "monopoly" straw man, the alternatives are growing by leaps and bounds. iWork on the Mac and iPad, Google Docs on the web, etc. The market, in this case, is actually balancing itself out quite well. Those who buy office are, more often than not, *gasp* those who actually need it because of their job (e.g. they need access to Sharepoint projects). The enterprise will continue to use office for a while yet, but things always move slowly in the world of business IT, so that's far from a surprise. At the moment, everyone's benefiting. Microsoft need to get their act together, and other alternatives are gaining greater traction now than they ever have. It's about time we have some true competition in this arena, and at long last that's exactly what we're getting.

Reply Score: 2

RE[2]: So what?
by TemporalBeing on Thu 8th Nov 2012 18:15 UTC in reply to "RE: So what?"
TemporalBeing Member since:
2007-08-22

Educational discounts are not illegal. Period.


Actually there is one scenarios where a Discount can be illegal - when you discount below what you filed with the Federal Government to charge the Federal Government on the GSA Schedule as by law, that is to be the lowest price.

Now, you can do it; but I wouldn't want to be you when getting caught.

Reply Score: 2

RE[3]: So what?
by darknexus on Fri 9th Nov 2012 03:07 UTC in reply to "RE[2]: So what?"
darknexus Member since:
2008-07-15

Actually there is one scenarios where a Discount can be illegal - when you discount below what you filed with the Federal Government to charge the Federal Government on the GSA Schedule as by law, that is to be the lowest price.

Now, you can do it; but I wouldn't want to be you when getting caught.

Well, of course, but I really didn't think that would be relevant here considering that we're talking about a product made by Microsoft. They may screw the users more often than not, but they know how not to get in trouble with the feds. The really sad thing is, our government is as dependent on Microsoft technologies at this point as is any business, so I suppose even if Microsoft discounted below what they filed for GSA, they might still get away with it where most others wouldn't.

Reply Score: 2

In other words..
by Bill Shooter of Bul on Thu 8th Nov 2012 15:45 UTC
Bill Shooter of Bul
Member since:
2006-07-14

Microsoft focused on maximizing profit, at the expense of building great products for customers.

This has been the downfall of MS. This is why they don't own the smart phone or tablet os market. This is why it will be very difficult for them to make inroads.

Reply Score: 4

Points....
by TemporalBeing on Thu 8th Nov 2012 18:52 UTC
TemporalBeing
Member since:
2007-08-22

The first has been its own success. With near saturation of its traditional market for desktop productivity apps they have struggled to find ways to grow, or at least get existing customers to upgrade to new versions.


Customers are not upgrading because it's not about new features. Feature saturation occurred in productivity a long time ago and new features are only for the edge cases where niche markets need niche market features. 99% of the world will do with 33% or less of the features in Office.

The primary response here has been to grow the Office suite, particularly through the creation of the Office Server products such as Sharepoint and addressing long-term weak points like collaboration.


SharePoint is a piece of crap. So is its primary competitor LiveLink.

As another poster put it, users hate them but consultants (e.g. Microsoft Partners) love them because they rake in the dough with all their problems.

Large companies (e.g. the GE's, Northrop Grumman's, Boeing's, etc.) IT likes them because it can get some of their users to put more information on the network in a more controllable (by IT) manner; but it still fails the users.

Office "Server" products are not a way to grow the user-base. Fixing the problems in office will. For example: first class ODF support instead of the buggy support it presently has, abstracting the file format from the user interface so that what's store in the files is not so dependent on the APIs within the version of office used and files are more reliably worked with (displayed, edited, etc.).

The second headwind has been the emergence of free, or extremely inexpensive, alternatives to Office. This started with the emergence of Open Office, though it wasn’t until Google Apps that free productivity software gained serious mind share. Prior to Google Apps Microsoft was content to address the free/cheap consumer productivity app space with a separate suite called Microsoft Works. The challenge from Open Office lead them to create a Works Suite that includes Microsoft Word rather than just the Works Word Processor.


Competition did good. They need to adopt ODF properly to help foster it more.

For Office 2003 Microsoft created a “Student and Teacher” edition to bring Office into the academic world at low-cost.


This is a load of crap. Microsoft had a "Student and Teacher" edition (though not specifically by that name) long before Office 2003 at a lot cheaper price. You couldn't find it on the shelf in the stores - you had to go through your educational institution to get it.

By Office 2007, with Google Apps now a reality, Microsoft turned “Student and Teacher” into a “Home and Student” edition so they had a low-cost offering to counter Google Apps for consumers who wanted the real thing.


So the higher level of competition made them put it out to the general public. Good.

It’s important to current discussions to understand these efforts by Microsoft to counter free/low-cost Office competitors because they are playing out even in the latest offerings. The Microsoft Surface and Windows RT come with Office Home and Student Edition for the same reasons it was created back in 2007. How do you bring a free/low-cost Office to consumers without a material negative impact on Office’s margins?


Putting it on WinRT was about keeping the monopoly pure and simple - for both Windows and Office.

Keep in mind that the vast majority of Office revenue and profit comes from sales to businesses, mostly larger businesses. So the trick is to keep those businesses buying the more expensive and profitable editions of Office while making the same software available to consumers at low-cost. Microsoft has tried a number of things to do this, from the composition of the suites to licensing restrictions.


Case in point - and many do not like the pricing structures. They just don't feel like they have much of a choice.

The third head-wind has been the cost of ownership associated with Office, and other products that don’t bring a strategic advantage to the customer. This is not primarily the license price, although it is a factor, it is the associated capital and operational costs. Microsoft was already struggling against this problem when Google brought GMail and Google Apps to the party. As Cloud-based services they transferred much of the capital and operational expense to Google. Microsoft had started work on bringing Exchange into a services world and Google forced them to accelerate the effort.


Oh, so you mean the server farms to host Exchange and its SQL Server back-end, and all that junk? The ones that cause endless headaches for IT in maintenance and upgrades, not to mention security and stability?

Perhaps with Microsoft taking more of a roll in running it for customers they'll actually fix the problems. Wishful thinking, I know.

The fourth headwind has been the switch from formal communications such as memos and reports to informal communications such as email, instant messaging, and text messages. This has reduced the Minutes Per Day (MpD) that users spend using Office and reduced its perceived value.


That perceived value is only by those that think every minute of the day should be spent using their own software. You're probably using the wrong metric to evaluate the perceived value, or value at all.

A better metric would be how well it enables them to get their job done, and how quickly. In other words, can someone get their job done quickly and move on to the next task, instead of playing endlessly with the outlining in Word to get it to work right, or fighting bugs in Outlook, or...

Just let them get the job done and move on, using your software or not. It shouldn't matter. If I spend 5 minutes doing the task using one tool, and another tool took me only 3 minutes, which tool do you think I'd use? Which do you think I'd want my employees using? Which do you think I'd train them on?

The first is that many users, and nearly all business users, have a need for a range of Office applications and services beyond the core four (Word, Excel, Powerpoint, OneNote) applications.

True

[q]So Outlook (and Exchange) have real value.


False. Outlook and Exchange have a marginal value. What they do is typically served better by other software. I moved from Outlook (of which I was a heavy user) to Thunderbird; one key reason: filter rules. Outlook - even its Exchange Server side counter part - only processes about 100 rules reliably; after that, its random for 1 more rule and the rest will be ignored.

Exchange is just a behemoth that costs to much to main and keep. It's a negative value regardless of what it does until they substantially improve it. But then, it probably wouldn't be exchange any more.

Access, Publisher, InfoPath, Project, Sharepoint, Lync, and features like IRM/DLP have value.


Again, marginal value - or negative value in the case of SharePoint.

And so every business user is going to be licensed for some variation of Office that includes one or more of these applications or features. And there will be offerings for bringing (some of) these to consumers as well.


As a business owner I am explicitly forbidding Microsoft products from entering my business. There are better tools out there.

The second principle is that users have multiple devices and will want to use Office from all these devices.


True

The third principle is that consumers will pay little or nothing for Office, but having offerings for them is important to maintain or increase MpD.


Wrong metric.

Reply Score: 2