Microsoft's Hotmail founder goes for the (wrong) Office jugular with Live Documents
Sabeer Bhatia, one of the co-founders of Hotmail (bought by Microsoft for $400 million ten years ago), is on a mission to lobotomize Microsoft's $20 billion Office business. He has an uphill climb.
Context & Ripple Effects
Microsoft’s Office franchise was already drawing challengers: a 2006 report described a rival turning its sights toward the suite, and coverage a day earlier framed the contest as an online challenge to Microsoft’s core software. Live Documents gives Sabeer Bhatia—whose earlier company Hotmail was acquired by Microsoft—a conspicuous entrant in that fight.
The significance is less Hotmail’s history than the target: Live Documents is entering a category tied to Microsoft’s $20 billion Office business, alongside the emerging Office-suite challenger coverage of the same day.
First-order effects
- Live Documents places Sabeer Bhatia in direct competition with Microsoft Office, giving prospective productivity-software users another online-oriented option to assess.
- Microsoft must defend Office against a challenger whose founder is closely associated with a product Microsoft previously acquired.
Second-order effects
- Other Office challengers gain a clearer competitive frame: the contest is increasingly defined around online delivery rather than only feature-for-feature desktop software.
- Buyers evaluating productivity tools gain leverage from a more visible set of alternatives, even as Live Documents faces the difficulty of displacing an entrenched suite.
Third-order effects
- If online challengers win meaningful usage, Office competition shifts toward service delivery and switching costs rather than packaged-software incumbency alone.
The trend: Productivity software is becoming a contest between Microsoft’s established Office franchise and online-first challengers seeking to lower the barriers to trying alternatives.