Office 2.0 = free online collaboration

Office 2.0 is in the news today, with a conference of the same name going on in Silicon Valley. Google has announced Google Docs and Spreadsheets, and Zoho has announced its Virtual Office. Feature comparisons aside, I think the real story is free online collaboration, which is the next battlefield.

Google Docs and Spreadsheets combines Writely and Google Spreadsheets together into one simple user interface. This makes a lot of sense and follows the tradition that Microsoft started with Office 10 or 15 years ago. Google has added a few more features to each product but the new UI is the main improvement. Google clearly has its sights set on Microsoft Office users, but they are approaching the problem from a different angle. Google knows that on a feature comparison basis there is no contest...Microsoft Office wins. So, they are using a business model (FREE) and a new user paradigm (online collaboration) to compete. Good move.

ZOHO Virtual Office is a new integrated version of several of their existing office productivity applications. Zoho has just about everything; spreadsheet, word processor, graphics, projects, Planner, Chat, CRM, etc., and more coming.

Zoho is available free to end users, and reportedly will charge $9 per user for Small & Medium Business (SMB).

FREE is not the problem - Microsoft Office has competed against free products for years. That is no problem. OpenOffice, StarOffice, and a host of other free office productivity suites have been around for a long time. Microsoft Office is still the popular choice for business users.

The battlefield has changed - In a fight between an alligator and a grizzly bear, the terrain determines the victor.

Google and Zoho are moving the battle away from the desktop to online collaboration. Users want to have one source document that anyone can update in real-time. The "wiki style" collaboration applied to documents, spreadsheets, and presentations.

This is the obvious weakness of a desktop client application like Microsoft Office. Microsoft recognizes this and is making improvements. Groove Networks, now part of Microsoft, is all about online collaboration. Ray Ozzie is pushing Windows/Office Live as the glue in the Client/Server/Services model of blended services.

Steve Ballmer says Windows Live is the most important initiative at Microsoft. Listen to these quotes from an eWeek interview with Steve Ballmer; "We're in a transition to software that is live. It will be click to run, like a Web site," said Ballmer. "We believe in evolving to click to run."

Windows Live is a growing collection of service add-ons for Windows. Some of the services are shipping, such as Windows Live Messenger and Windows Live Expo online classifieds. Nearly a dozen services are currently in beta test on the Windows Live Ideas Web site.

"The most important thing is the Live platform. The next level of consumerization is coming from Internet services and Internet delivery,"

There will be security concerns and scalability issues with the new online collaboration model. But, there is no doubt that a segment of the market wants to work this way. We are in the early stages of this evolution. The new winners and losers will not be known for several years. One sure winner in all of this is the customer. Competition is a great thing.

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Comments

[Jason L. Baptiste]

Hey Don, awesome post. I agree with you as everyone it seems is trying to fight the wrong battle: replace MS Office with a free online version. It's not going to work "just like that", and MS will probably be the one to do it anyway. I think the three pillars of Office 2.0/ where Business Apps are going are as follows:

1) Collaboration- No longer will the workflow be one-sided and confine a user to their own computer. Business apps will become multi-dimensional and require social interaction.
2) On-Demand- The new businesses apps will be on-demand, to allow for this collaboration. This is one of the more obvious pieces of information. The only way for collaboration to really occur is via software on-demand.
3) Niche- Software as we know it is really general, that can then be utilized by niches. Create a word document (General App), that works for your business,etc. We'll start seeing applications that are in themselves niche, and not so general. ie- niche apps for public relations, the medical field,etc. They will be on-demand, facilitate collaboration, and integrate exisiting Office 1.0 software in some manner. Platforms like Apex, allow for a large community of developers to be harnessed to make this actually happen.

Long comment, yep, I know, but this space is heating up and this seemed like a good forum to express some of my musings.

-JLB

[Yori Nelken]

Agree, Don. I'd like to over emphesize though that the biggest significance of "office 2.0" is not the "software in a cloud" aspect, but rather the ease of collaboration, or as Esther Dyson said earlier today in the Office 2.0 conference in San Francisco - it is about "adding grammar to collaboration". It is about the objects that we deal with in our professional lives, and how they interconnect with each other.

[Al]

Why aren't Microsoft competing here with Google and Zoho? It's no good talking about the regular Office product because as you say thats a different product/market from what Zoho/Google and others are cornering.

Microsoft should be at the fore front here they should be leading the way, is the existing Office cash cow holding them back or are they asleep at the wheel?

It would be so great to see the business software leader blow our socks of with their online collaborative office suite what are they waiting for?

regards
Al

[TanNg]

I think MS should compete with Zoho/Google here. Because if online office suit is aiming to different maket and is not competitor to MS office so MS participation is not threatening MS office; if it is competitor to MS office so at least MS dont allow Zoho/Google move freely in this field.

[Coleman Smith]

First, lets put all bias aside and be realistic about this. Microsoft, unless they get on board will lose this war. Google is pushing people down and taking names, but the winner of this war will ultimately be an outfit like Zoho and ThinkFree. I have subscribed to all of them, as this allows my partner and I to do business and update a single file without having outdated information or repetitive emailing, blah blah blah.

The things in business that separate great companies are what they do different from one another. Zoho and Think Free in my opinion have separated their offerings from Google, Zoho truly is the leader, and aside from them they have no competition. Microsoft can spend dollars, but at the end of the day, its a matter of position and branding. Microsoft has branded their OS better than anyone in history which has allowed them to corner the market share they way they have. They've done likewise with their office suite, however Zoho is one helluva office suite, and aside from marketing snafus and idiot management, they should clearly dominate this genre. Google has not the tools that Zoho has and should not be classified in the same breath.

Desktop computing as we know it is on the decline truly. It will always have a place, but with the use of smartphones, online collaboration, streaming media, I forsee my windows enabled smartphone doing more for me than my laptop does now. Think of this, AOL offers 5gb of storage through Xdrive. Once they can streamline this process, others will follow suit, drive space will get larger, and why would i need a pc or Microsoft office other than to play games on?

Food for thought