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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by TemporalBeing on Thu 8th Nov 2012 18:52 UTC
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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.


[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.


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.

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