Yesterday the New York Times said "Google Ready To Rumble With Microsoft", referring to Google's foray into online Office Apps. Today a survey from NPD says 73% of PC users have never heard of Google Apps, and another 21% have heard of them but never used them. Just one half of one percent said they use web based apps instead of desktop software.
Google CEO Eric Schmidt was asked by the New York Times if he really believed that 90% of all computing would be done in the cloud. Schmidt's response?
“In our view, yes,” Mr. Schmidt says. “It’s a 90-10 thing.” Inside the cloud resides “almost everything you do in a company, almost everything a knowledge worker does.”
The NPD survey supports what Microsoft's Jeff Raikes said in response to Google's claim;
“It’s, of course, totally inaccurate compared with where the market is today and where the market is headed,”
It is fair to say that Google has its head in the clouds. (pun intended) That is a fine place to be if you are a web search company, but that is not where office productivity software is now, or will be anytime in the near future. Google's arrogance will be its undoing. Their total reliance on internal Google engineers while ignoring customer feedback, and their lack of experience in direct sales and customer support, will not work in the business software world.
Duncan Riley at TechCrunch is singing the Google song. He proclaims "Majority of Americans on Google Docs" and says "...given the online alternatives there is little doubt that the number making the switch to online apps will continue to grow."
Joe Wilcox at eWeek takes the other view with the provocative headline "R.I.P.- The Web 2.0 Office Suite" The eWeek article included this pie chart of survey responses.
The eWeek article goes on to say; "The scant adoption makes some sense of Microsoft's Office Live Workspace, which went into broad beta last week. The service clearly is designed to be an adjunct to Office desktop software rather than a Web-based alternative. If NPD's numbers are indicative of real-world usage, Microsoft hasn't much to worry from Google Docs and Spreadsheets or other online alternatives. Maybe too many people make too much about the Web 2.0 threat to Office. "
Mary Jo Foley of ZDnet gets it right when she says;
To me, the way that Microsoft is addressing the so-far small number of users who want Web-based productivity software is disruptive. Microsoft isn’t listening to the venture capitalists and A-list bloggers who are ridiculing the Redmondians for not discontinuing immediately any more client-based Office development and turning Office into a Web-based product.
Instead, Microsoft is doing what the majority of productivity-suite users currently want, by adding a Web-collaboration element to Office with Office Live Workspace. At the same time, Microsoft also is sowing the seeds for a Web-based consumer office suite with the Notes and Lists components of Office Live Workspace. If and when there’s enough customer demand for such a product, Microsoft won’t be starting from scratch to build a Web-based suite.
Not rushing headlong into a bubble-licious market doesn’t equal denial. Sometimes resisting peer/pundit pressure can be pretty disruptive, too….
As I said yesterday, Microsoft has played the role of market disrupter before against IBM and the mainframe software crowd. Microsoft has adapted to many market shifts and disruptions over the past 20 years.
Microsoft has a long history in enterprise software and office productivity applications. Microsoft has done a great job listening to customers and even anticipating their needs. The recent announcements from Office Live and the investments in massive data centers signal where Microsoft is going.
Software plus Services as opposed to Software as a Service. Microsoft is giving customers the best of both worlds; powerful desktop software, complimented by web based services. It may not make headlines with the Web 2.0 crowd, but it is the best path for customers who want the best of both worlds.