Microsoft Hits Back as Google Muscles In
Microsoft Corp. has publicly dismissed Web-based Google Apps as a competitor to its Office software suite. But, behind the scenes, Microsoft is stepping up its efforts to halt Google Inc.'s encroachment on its business-software turf.
Context & Ripple Effects
Google had been targeting Microsoft’s business-software base since its 2007 business-applications launch, and its 2009 “Going Google” campaign made that challenge more explicit. Microsoft had already framed enterprise adoption of Google Apps as a point of contention in 2007.
Microsoft’s intensified response matters because Office is also being delivered as a cloud service, moving the contest from a conventional software-suite comparison toward control of everyday business workflows.
First-order effects
- Microsoft must devote more product, sales, and positioning effort to defending Office accounts against Google Apps as Google presses into business software.
- Google Apps becomes a more direct focal point for Microsoft’s enterprise-software strategy, rather than a competitor Microsoft can readily downplay.
Second-order effects
- Enterprise buyers face a sharper choice between Microsoft’s cloud-delivered Office offering and Google Apps, raising the importance of migration and implementation in purchasing decisions.
- Microsoft and Google are pushed to compete for ownership of the same collaboration and productivity workflows, not merely for individual application features.
Third-order effects
- If cloud delivery becomes the primary route for office software, incumbent suite vendors’ installed-base advantages become more contestable as workflow data, administration, and deployment move into the service layer.
- The business-software market is trending toward competition over the platform that organizes work, where implementation and switching costs can shape vendor power.
The trend: Business productivity software is shifting from packaged suites toward cloud services competing to own enterprise workflows.