Imitation Isn't Always Flattery: Microsoft Previews Google Apps Killer To Beta Testers
Imitation isn't always the sincerest form of flattery, and this is certainly the case for Microsoft in the development and launch of its web-based browser versions of Word, PowerPoint, Excel and OneNote.
Context & Ripple Effects
The beta preview lands more than two years after TechCrunch's March 2007 report confirming Microsoft was building a Google Apps/Zoho competitor, and it finally tests the question Read/WriteWeb posed in its "tortoise versus hare" analysis of Microsoft's follow-the-leader strategy: can the slow mover overtake once it arrives? Google defined this market when it disclosed its long-awaited office suite plans back in August 2006, so Redmond is shipping into a category the challenger named.
The commercial tension was already explicit by early 2008, when VentureBeat noted Microsoft was flirting with cloud applications while still making billions off the desktop variety — which is why a free, browser-based Office reads less like an offensive product than a defensive one, built to keep existing customers from drifting to Google Apps.
First-order effects
- Beta testers get working browser versions of Word, Excel, PowerPoint and OneNote, giving Microsoft's massive installed base a web-native Office option before they consider switching to Google Apps.
- The move confirms the web apps as a protective play: Microsoft is meeting Google on Google's chosen ground to defend the Office franchise rather than to open a new market.
Second-order effects
- Google Apps and Zoho lose the 'there is no web alternative' argument and must now differentiate on price, collaboration, and independence from the incumbent suite maker itself.
- Microsoft's own business model absorbs the strain VentureBeat flagged in 2008: every user who adopts the web versions is a potential cannibalization of the desktop license revenue that still dwarfs the cloud business.
Third-order effects
- If the pattern holds, productivity suites migrate from paid, packaged products toward free browser-delivered utilities attached to broader platforms, compressing license-based software economics industry-wide.
- Office's center of gravity shifts from a box sold per seat to a retention layer binding users to Microsoft's ecosystem — a structural redefinition of what the company is actually selling.
The trend: Productivity software is moving from licensed desktop packages to browser-delivered apps, with the incumbent following the challenger into the cloud rather than setting the pace.