Google competing with OpenOffice and StarOffice

Google Spreadsheets will be announced today. Google also recently acquired Writely, and On-line word processing company. All the pieces are coming together for Google to compete directly with free open source offerings such as OpenOffice and Sun's StarOffice. Last year there was speculation that Google and Sun would team up to offer a Google version of StarOffice. Google has instead decided to go its own way and compete with all the open source projects in the spreadsheet and word processing space.

C/Net says "Google spreadsheets turns up heat on Excel" I don't think so. Microsoft Office is a powerful, industrial strength, client based, information worker productivity platform. Microsoft Office is moving beyond just being a collection of applications (Word, Excel, PowerPoint) to being a server based application platform for ISVs. Lots of companies run their business on Excel spreadsheets. Now creative start-ups are using Office as a front end User Interface to a whole variety of business applications.

So, while the headlines may scream Google Spreadsheets is competing with Microsoft Office, the more accurate statement is that Google is competing with OpenOffice. Remember, free and open source alternatives to Microsoft Office have been around for a long time. They serve a different segment of the market. Google is competing with Open Source and going after that market.

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Comments

[James Governor]

you sound a bit like ibm defending the mainframe circa 1991..

industrial strength eh?

seriously Don, Excel and Office *do* have to compete with the good enough.

you might argue, and i havent even seen the google service yet, that it competes with excel server...

[Cordula]

Don, you may be right in the short term. But how about the long term, when all the kids will be using Google or open source products making them the de facto standards of Office applications?
Microsoft is not doing anything to asure their products being the ones everybody is growing up with. I think, that will hurt some day.

[Ricardo Conte]

One point against companies using Google Spreadsheet is the fact that spreadsheet data (it is said) will rest on Google's servers, wich is unaceptable for almost all companies - who would trust "Google-do-no-evil" their data ? Anyway, what will be their next move ?

[Miles Barr]

If Google is competing with OpenOffice then it's competing with Microsoft Office, because they're all office applications, you can't pretend their spaces don't overlap.

I do think you're right that there is a different market that Excel also sits in that's beyond just a spreadsheet, where it's a platform to build applications. But the lower end of the market where people use spreadsheets to make lists and do 'simplistic' calculations (i.e. not multi-sheet, VBA backed things), Google Spreadsheets will be a very attractive option because it does enough and people can just use it, i.e. they don't need to install anything.

OpenOffice tries to be a complete replacement for Microsoft Office. Google Spreadsheets makes that functionality free and easy to get to. That's what Microsoft has to worry about, not that Office has a competitor, but that it marginalises one of their cash cows (Excel) into an expensive specialised tool with a smaller market.

[/pd]

Noy sure, why you think they are going after the opensoffice.. What happens if they have an API ??think of the mahsups that can be produced ??

[comical ali]

"No I am not scared, and neither should you be!"
"There are no free alternatives to MS Office. Never!."

[Jason Wood]

Don, I think you're right for now. But the fact remains that a significant portion of Office productivity apps are sold to consumers (and business users who need something to read work docs at home) and, for a great many of them, things can be "just good enough."

While I won't be turning to Google Sheets when I'm building a new valuation table for the universe of stocks I follow...I certainly wouldn't mind having it (for free) at home so that my wife can update our home budget and keep our contact lists updated.

What percentage of Excel installs do you think use even 10% of the functionality? I think the number is far less than Microsoft is willing to admit.

[Jeremy Wright]

"If Google is competing with OpenOffice then it's competing with Microsoft Office, because they're all office applications, you can't pretend their spaces don't overlap."

That's the same argument folk use about Gmail being a replacement for Outlook. It's not. And the way it's going it never will be.

Gmail only has 10 million accounts. So 2-3M early adopters, 2-3M of their followers, 2-3M techies who love Google... And, what, 2-3M mainstream users?

When you live in the tech world it's too easy to think that Google's products actually have reach.

[Miles Barr]

"That's the same argument folk use about Gmail being a replacement for Outlook. It's not. And the way it's going it never will be."

My point is that Excel has many types of users and they do different things. Some of them can do everything that can in Excel within Google Spreadsheets. For them it's a replacement, for others it is not.

Don is saying that because it can't do the advanced things that Excel can, Google Spreadsheets is not a competitor. He's basically saying all users of Excel need it for the advanced functions. This is wrong, I've seen some of the horrid things people do with Excel when what they really want is better lists in Word.

So the long term result is that for simple things people will use the free tool that's available over the web and all Excel users are, as Don implies, advanced users who need something more than Google Spreadsheets, but now that group is much smaller.

[Don Dodge]

Thank you for all your comments. I agree there is a near term perspective and a longer term view to be considered.

In the near term Google Spreadsheets is a consumer novelty, not a competitor to Excel. Lots of people will try it out for simple jobs. Will people be confident in storing their data on Google's servers? Some will, and some will not. It depends on how sensitive the data is.

In the longer term I think people will become more comfortable storing lots of their data on hosted servers. Don't forget that Microsoft will probably build out a world class hosted server infrastructure for consumers and small businesses, called Windows Live and Office Live. In the not too distant future Microsoft may have an online word processor or spreadsheet to support that segment of the market. It would be very easy and obvious for Microsoft to do this.

The theme of today's post is don't over react to a "beta" spreadsheet from Google. And consider that for the near term at least, it competes more with OpenOffice, StarOffice, NumSum, and some of the other online spreadsheets.

Jeremy Wright makes an excellent point. Gmail does not compete with Outlook, and Google Spreadsheets do not compete with Excel. Writely does not compete with Word. Each serves a segment of the market better than the other. Microsoft Office is overkill for some segments of the market, but don't be surprised if Microsoft delivers something great with Live.

In the longer term there are lots of options that could be played out.

[Ricardo Conte]

I think the main points are: a.market segments; b. where do profits come from. So: A. Google Spreadsheets will not fit today corporate costumers because no company will ever store sensitive data in a popular server; to change that Google should offer corporate the needed security and trust. B. Don says "don't be surprised if Microsoft delivers something great with Live": shure, so some MS customers will be migrating from a payed product from MS to a free product from MS; how to replace the lost income ?

[Ricardo Conte]

To clarify the first point: people in general will feel very confortable *rigth now* to store their data (recipes, personnal budget, shopping list ?) in Googles servers, so MS lost something in this case. As for companies, they would rather store data with Microsoft or, say, Oracle, and that should not change with time, unless Google changes something in their product.

[savvysoft]

Why does everyone assume that MS won't react if this does in fact take off?

But so much of the debate seems to be centered on whether the stripped down free version will be enough for a large group of people. That may not be the right question to ask. After all, don't most machines come with free spreadsheets already, like Works, that do much much more than Google's does?

The advantage to Google's over Excel's is the file distribution/sharing. Like salesforce.com, or like Shutterfly for consumers.

Then it starts to get much more interesting if they offer something like TurboExcel with it, to selectively hide things or create the killer app for Web services.

[Ricardo Conte]

Did anybody heard about Google Vista ?

[rajAT]

Manual Trackback..

http://rajatgupta.wordpress.com/2006/06/06/google-spreadsheet-review/

[Victor]

I like most people don't use 98% of the random "high-power" (aka useless) features in Excel. Gimme something free that lets me collaborate with others and does what i want and I'll gladly ditch Excel. Google's offering is pretty weak (not graphs even!). But I"m sure they'll catch up, and for the majority of people who use very little of Excel's monolithic functionality, it'll be an easy switch over - at $0 and only needing a web browser, the price is right!

[/pd]

"Gmail does not compete with Outlook, and Google Spreadsheets do not compete with Excel. Writely does not compete with Word"

I beg to disagree. the value Props are always contenders in the market. What's happening here is early adopters moving who can turn the knob into main stream business value !!

What is the Gmail hosted services about then ? Is this not a direct positioning to other products ?

Its verymuch like this svc-1.google.com

[Tux]

Just make sure you use firefox (or safari if you have a real computer) to use google's spreadsheet...like excel, internet explorer crashes happen frequently. I guess even industrial strength applications need a rest now and then.

[Jeremy Wright]

As a point of reference, while most users only use 10% of the features, they are always a *different 10%*. Since Google's only copied the most absolute basic functions, guess who they're going to appeal to...

Yep, the most basic of users. And if I was Microsoft, that wouldn't worry me at all. What would worry me is if there were an API and this started becoming a true platform. Or if it came out of beta. Or if the product got improved over time.

This iteration, though, is just as likely noise as it is some kind of real signal from Google.

[Kotendra]

This is nothing but media's over reaction. Microsoft remained undisputed king in office software even in the face of stiff competetion from terrific open source products like Open Office. If at all people want a free alternative to M$'s office, they would go for Open Office but not amateurish web based application like Google Spread sheet. Please move on guys...

[Doug Cummings]

"This is nothing but media's over reaction. Microsoft remained undisputed king in office software even in the face of stiff competetion from terrific open source products like Open Office"
Google can be successful where a lot of people have failed because of inertia; there are more people who are better educated on the web, and 'Google' makes sense to people; they give away cool free stuff that works well. The fact that we and the media are all talking about this is proof of Goog's momentum.

[Jeff Schrock]

Google's entrance into personal productivity is great on a consumer level. While I don't believe there's a business model or distribution strategy behind online productivity apps from GOOG and thus unlikely to seriously compete with MS/Excel in the long term, it's great to see someone taking a novel approach. MSFT - for WAY too long, has rested on it's laurels and systematically rejected innovation. Why didn't MSFT do Plaxo? Why didn't MSFT do online extenstions for Office? Mainly because they don't have to. And they wan't you to buy silly collaboration servers. Now, they might have to take this more seriously.

[David Eads]

Though I'm coming into this thread a bit late, I have to say I find Don's assertion both compelling and flawed. However, take my analysis with a grain of salt -- it's mainly anecdotal and speculative.

First, if there was spreadsheet-like product that was truly serious -- as in genuine, accurate statistical functions, graphs that value intelligence and substance over fluff, and so forth -- then a relatively small but significant segment of the market would bite.

Second, Excel, even if it maintains marketshare by being bundled with the office suite, is likely going to lose actual users because of the proliferation of free software and commercial database tools for small businesses, and the cottage industry of consultants, integrators and implementors of such solutions. Many small businesses use Excel as a poor-man's database. But with outsourcing of development and a lot of robust tools aimed at this market segment, I predict that Excel usage generally is going to decline here, albeit slowly.

Third, if we assume the first two points, then the market for an industrial strength spreadsheet a-la Excel is going to shrink unless MS actually makes a tool that can be used by people who take data seriously, but there is still a huge market for simple spreadsheet applications, which is where Google could make their splash. In that sense, Google's not competing with OpenOffice or MS Office -- it's trying to gain a foothold in an emerging market (if we want to ascribe that much strategic intelligence to their efforts).

Spreadsheets in general suffer from a bunch of strange misuses and abuses, but I can see the market splintering a bit here with applications that are more thoughtfully targeted.

Of course, all of this is obscured because if you want X piece of the Office suite, you're pretty much doomed to get pieces W, Y, and Z, which still gives Excel market dominance for the foreseeable future, even if actual usage gradually declines.

If I want to add up tables of numbers, any basic spreadsheet will work. If I want intellectually rigorous data analysis and high quality charts, then I'm skipping Excel, OO Calc, etc, and will use a serious tool for the job, like Mathematica, Python, or R.

[Fortunato]

Google is going to hurt FOSS projects far more than they'll hurt Microsoft which is OK except for the fact that Google puts on such a facade of supporting FOSS and so many people buy into this charade.

Google may have had altruistic motives 5 or 6 years ago but they're now driven by greed.

Google's second item on their "Ten things Google has found to be true" is "It's best to do one thing really, really well." Looks like there need to be some revisions and while they're making them they should probably take the "don't be evil" stuff out since they're fast becoming one of the most corrupt companies in American history.

If I sound bitter it's because I truly believed in Google and they've let me down.

[Sin Kao]

Open Office has a ten year headstart on Google. It is already available in online format via the CosmoPOD online desktop service. http://www.cosmopod.com. I seriously doubt that Google will get very far.