In this series, I will evaluate health of various businesses within Microsoft. While it’s easy to bash the biggest software company on the planet, I will be as objective as possible and give Microsoft credit when it’s due.
Productivity Suite:
Google Docs is a perfect example of disruptive innovation – unlike what most people might think, disruptive innovation is usually a low-end and lower-quality product that is aimed at price-conscious or a different set of customers. Industry leader – in this case Microsoft – might get too carried away in making its product (Office) feature rich and too advanced while a new entrant (Google) offers something simple and low-priced (well free in case of Google Docs!). Google Docs obviously has an added advantage of living in the cloud, thus providing access from any device with internet access. Google spreadsheets are fairly simple and intended for use by majority of users who either don’t know or don’t need to to use all the power provided by Microsoft Excel. However, with improvements in technology, the lower-quality disruptive product can catch up with most users’ needs and make the higher-quality product irrelevant before the incumbent (Microsoft) has time to act on it!
Office (along with Windows) is multi-billion dollar business for Microsoft, and investing in online docs, something that is free and can cannibalize its cash cow would absolutely make no sense – except when you consider that online docs would one day be powerful enough for most users. Microsoft obviously recognized it, and in my view, is playing an excellent strategy of service plus – leveraging strength of its powerful and ubiquitous Office software and combining it with the online disruptive model to offer a freemium version of Office. Last year, when I reviewed alpha version of Office Plus, it was terrible – but with time Microsoft has improved it significantly and can pose a threat to Google Docs and Zoho. There is yet no clear alternative to Microsoft Powerpoint (though Zoho Show can become one), and HTML5 despite all the push by industry heavyweight is far from reaching the power of desktop applications. So despite the fact that Microsoft was late in acting on its online service-plus strategy, I think it is not too late. If Microsoft can execute its strategy well (simplicity is the key), it can prevent many users who are yet to discover the beauty, simplicity and low price of online documents stick to Microsoft Office 2010. In my view, even dedicated Google docs users can be tempted to switch back to Office 2010 – don’t expect them to give more than one chance though: Office 2010 has to execute perfectly in order for skeptics to believe that there is still a breath in sleeping giant!
Score:4/5 Scoring Explained:
1 -> in deep trouble
2 -> in bad shape, but there are chances of recovering
3 -> can’t say
4 -> in good shape, need to execute well
5 -> in great shape
