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"We've put more of our marketing IQ behind alternative business models and alternative distribution strategies in the last two years," corporate vice president Chris Capossela said in an interview at Microsoft's Worldwide Partner Conference taking place here.
"It's definitely something where we feel there is this whole population of people we are not reaching."
Many of those people are in emerging markets, where Microsoft is trying things like prepaid cards good for two or three months worth of Office use. But Capossela agreed that there is an opportunity to reach consumers in well-developed markets like the U.S. and Europe as well.
"Office is used by tons of those folks, but it's often old versions of Office," Capossela said, adding that the company is actively trying to see whether different ways of pricing or offering Office might prompt more consumers to use the latest technology.
"Would prepaid cards work in the U.S.?" We don't think so, but those are the types of questions we try to ask ourselves," he said.
One possibility is to introduce some sort of online productivity options as part of the Office Live suite of software. BusinessWeek reported last year that Microsoft was exploring such a move.
Which way next?
Microsoft won't say for sure that's where it's headed, though CEO Steve Ballmer did note in his keynote speech on Tuesday that Microsoft would soon rebrand its existing small business Office Live tools as it plans to add services for individuals to the Office Live line.
In its initial incarnation, Office Live has been about making new services available over the Internet, primarily e-mail and Web hosting. But Microsoft has been grappling for some time now about whether to offer more of its consumer software for free, supported by advertising.
An internal Microsoft position paper, as reported by CNET News.com in 2005, made the case for an ad-funded version of Microsoft Works, noting that Microsoft gets only a couple of dollars per new computer that sells with a bundled copy of Works. That revenue could easily be surpassed with an ad-funded version.
While those economics may indeed be true, Capossela pointed out that it's not just about revenue. One of the challenges is whether people really want to see ads when they are in a spreadsheet or word processing program.
"You can't just apply the economics," he said.
And Microsoft may not need to take its entire Office or Works product online. The company has talked broadly about a "software plus services" strategy in which online services are used to augment existing software products. One option that would fit that model might be for Microsoft to offer a "light" version of its productivity tools over the Internet, while relying on the full Office for more advanced document creation.
Both Capossela, in the interview, and Ballmer, in his speech, pointed to what Microsoft has done with Outlook and Exchange, where the e-mail and calendar data can be most comprehensively managed in the Outlook desktop program, though it can also be accessed via a Web browser through Outlook Web Access, on a smart phone through Outlook Mobile, or even through voice recognition on a standard telephone.
"That's really a great solution," Capossela said, but wouldn't say whether Microsoft would offer a similar approach to other Office applications such as Word and PowerPoint.
Google, for its part, already offers Google Docs and Spreadsheets, a lightweight, Web-based word processing and spreadsheet program, with the company also making moves to expand to presentation software.
Although it faces competition from Google and OpenOffice--whose offerings are free--Microsoft continues to see strong sales in the unit that includes Office. The Microsoft Business Division, largely on the strength of Office, grew its revenue in the most recently reported quarter to $4.8 billion, up from $3.6 billion in the same quarter a year earlier. Operating income grew to $3.4 billion from $2.4 billion a year earlier.
Capossela did say that it doesn't see a distinction between desktop productivity software and Web-based productivity software.
"We're very happy to be the leading vendor in the space and we want to continue to be the leading vendor in the space," he said. "We look at everything from ad-funded software to Web-based software to servers. Long term the way we differentiate from Google, it's the combination of all three: client, servers and services that is the winning strategy."
See more CNET content tagged:
Microsoft Office Live, Microsoft Works, Microsoft Office, Google Docs, Steve Ballmer
Out of 200+ Windows users I have three powerpoint users and zero Access users. That's why the bulk of them use OpenOffice.org. MS Office just isn't worth $350+ when compared to OOo.
OpenOffice does great for all of the everyday things I need to get done.
Charles R. Whealton
Charles Whealton @ pleasedontspam.com
http://www.dealtime.com/xGS-microsoft_office_academic
http://www0.shopping.com/xPC-Microsoft-Microsoft-Microsoft-Office-Professional-2007-269-11095
files (Like Text Edit does right now in OSX)? That would be the
only real threat to the expansion of OOo.
But then, most home users have no real need for MS Office. Most
work users have no need for the bloat and expense that MS
Office adds to the bottom line. It'd be easier for most offices to
use OOo for the majority of their userbase, at least until they
can convert their stuff to an actual open format to complete the
transition to OOo. (evil grin).
/P
Why am I not surprised, they are doing the same thing with the completely pointless home server nonsense.
Even businesses don't use most of the bloat, excuse me, features of Office.
What they need to do is offer a very stripped down version(even more so then the student and teacher edition) that caters to the home user. Add in good integration support for both Outlook, OE, AND Thunderbird. Decent integration with a few household level graphics editors, and maybe a simple version of Money. Along with that tighten up the vulnerability to macro viruses, since the potential users don't have an IT department to spend most of the day plugging holes.
Make it truly easy to use and make it secure, and price it fairly, not something MS very often does. does. Say in the $30-$50 range, and MS will finally have a winner.
However, if they continue this narcissistic push against consumer interests, they will find themselves further down the path of failure that they already are.
Windows market share is dropping and it will continue to drop. If their applications want to stick around they will have to play nice with the up and comers.
No Spock, that does not include OS/2.
I agree. Most home users do not use the majority of features. And if they do this and it's successful (I think it would be very successful), you will be kicking yourself for suggesting it to them, won't you?
And I suppose Starbucks sucks at making coffee too? Failure? Just because they don't crap in a box and call it Open Office fulfilling your every fantacy doesn't mean they are failures. What is MS Office's market share? How much does Microsoft make off of Office every year? I'd love to "fail" that well.
The only thing you are slaying here is yourself...
"Although it faces competition from Google and OpenOffice--whose offerings are free--Microsoft continues to see strong sales in the unit that includes Office. The Microsoft Business Division, largely on the strength of Office, grew its revenue in the most recently reported quarter to $4.8 billion, up from $3.6 billion in the same quarter a year earlier. Operating income grew to $3.4 billion from $2.4 billion a year earlier"
"You can't just apply the economics,"; just notice how many times it was mentioned in these two paragraphs that it is -- All About The "economics..." (with the "functionality" (ERR) yet to appear in the MS "spreadsheet") Duh! Now they are really thinking.
They don't truly understand the Internet and never have. They have to focus too much on their core offerings (Windoze and Orafice).
Google is 110% focussed on the Internet and hence why they are gaining ground and are dominant on the Internet. Everything Google does makes sense and dollars. They can untilise the Internet for all it's advantages.
Microsoft cannot do that because they cannot afford to put a gun to Windows and Office's head.
Therein lies their problem. They are making too much money from legacy products and they can't afford to change the paradigm, but this strategy will also guarantee that they lose in the end because the Internet is the future of software and services.
MS believes that it has to be the biggest baddest bully on the block.
It doesn't.
Web services is not going to catch on as much as some people think. All web services does is offload the problem while adding a problem of trust.
Web services is fine for some things, but no sane business is going to place its future on it. If the internet connection goes down, it is out of business for a day. They are also trusting the security of their data with an invisible third party. They are also entrusting that security is strong enough to beat out common attacks like man in the middle.
What is the web service company disappears along with all your files? It can and will happen.
It is much safer and easier to keep things in a network that you own, then have to reach out across the internet to access data.
The problem is that MS is too slow and too dumb to change how it needs to. It can't think outside the very small and vanilla box it put itself in.
Here's an idea-lower the damn price! Even a hundred plus dollars for the student edition is too much. MS seems to be thinking of everything it can to get people to use their products, except for the most obvious one; make them more affordable! It's not like they're hurting for money! Wouldn't it make sense to lower the price of a product, and maybe even take a slight loss for a while, to promote sales and get people hooked on that product?
Is it any wonder that OOo is such a popular alternative. That's what I use, and I love it. Best money I never spent!
The thing is though that there are still a lot of silly people out there who are buying these legacy products. These people have no idea and Microsoft will continue to rip them off while they remain unwise to where the market is now and todays price expectations.
It meets the needs of nearly all Office users and it reads and writes Microsoft Office files too. It's a little less pretty, but it gets the job done well. Ain't that what matters ?
http://www.openoffice.org/
Microsoft Office has many useful features that Open Office will never have. Does Open Office have Microsoft bob, or a talking dog to tell me what to do? No!
I will stick with talking dogs.
=irr(values, guess). The guess helps if you have an estimate for the rate of return, since excel has to iteratively attempt solutions. Maybe that will help you get off OS2...sorry commander.
http://www.neooffice.org/neojava/en/index.php
Neil Anderson
http://www.cyclelogicpress.com
Microsoft will just have to go back to selling a product that offers value for money, and at the price their selling Office, that would have to be a heck of a lot of value.
Office 2007 pro $759
Project 2007 $885
Visio Pro 2007 $829
$2473(!!!) for software that doen't do much more than it did over 5-10 years ago. Thats highway robbery. There haven't been any major innovations in the software in that period either, for the most part MS has just cleaned up the functionality, added some eye candy, and bloated the hell out of it. My use of office today is pretty much what it was using office 2.0 in the early 90's. And back then it cost a fraction as much then thanks to competition from Corel and Word Perfect.
My new computer didn't even cost that much, including the 3 year next day onsite complete care warranty and the $170 for Vista Ultimate (don't even get me going on that waste of $$$)
Clearly MS is in farming mode on their software, just as the record industry is on CDs. Guess what I now run on my home PC? Yup. Open Office. Any non-idiot is either going to do that, or pirate their ms sw.
Or something like that. :p
Let's see Microsoft:
1. Owns on the desktop
2. Owns in productivity software
3. Is making a grip of money
and yet are a "failure" because their haters deam their software as lacking quality, bloated, and too expensive?
If Office were weak like Open Orifice then people would be laughing at how lame Microsoft was (but it would be cheap/free!) Quality? Open Orifice crashes like any other turd out there. Quality is so subjective anyway you can never loose a quality argument (unless you are lame). Let's see some actual statitics you Microsoft haters rather than unqualified "people are noticing, switch from Microsoft products".
Every time Microsoft comes out with a new version of Windows or Office the same baseless negative comments are made yet Microsoft continues to dominate. Oh, my bad! That's because they are evil! Duh! I'm so stupid... I better go back to using my iPhone; what? say again? I can't hear you! Speak up! Did you say quality?
Who cares if they're pure evil? Who cares if they dominate? Who cares HOW they dominated? Who cares if they're predatory?
If you like MS products...then THEY WON!!!
If you don't like MS products...then IT DON'T MATTER!!
There is NO SUPREME TRUTH to all of this.
It's just small talk...over...and over...and over...ad naseum.
Windows or Office the same baseless negative comments are
made..."[/i]
Baseless?
Well now, perhaps you can show us how the following bases are
irrelevant. We'll start with Vista:
* DRM.
* Higher hardware requirements for the same features on other
OSes.
* Far higher hardware requirements just to get promised
features.
* Insanely late ship date (3+ years late).
* A codebase which can be credibly proven to be naught more
than rehashed XP/2k/NT - based.
* widespread driver incompatibilities.
* Far less security than promised, while other OSes maintain a
superior inherent secure structuring.
* a buggy and faulty WGA (in irony, becuase this comes from a
company who only got where they are because their products
were pirated widely. I don't condone piracy, but facts are facts,
and a reactionary habit of treating paying customers like
criminals is a dumb move on their part IMHO).
[i]"Is making a grip of money..."[/i]
Actually they have exactly two profitable divisions: Windows and
Office. The rest are hemorraging money badly. Problem is, of
those two pillars, Windows isn't making them the bank that they
had expected it to; widespread and credible analyses show that
Vista is failing (see also Dell reverting to XP as an option and
selling Linux pre-loaded -- by customer demand -- as a huge
for-instance).
Meanwhile, Office 2007 doesn't seem to be getting the
widespread adoption that MSFT expected it to (hence this article,
among many others like it).
To be honest, I hold no hatred for the company. I merely know
of and use far superior alternatives. It isn't just me, either... in
regards to your demand for statistics, take a peek through
recent articles here: A HUGE percentage of Windows' developer
mindshare has fled Microsoft, and appears to be growing.
Developers go where the money and potential is, which is
telling.. Dell, in an environment where OEMs run on thin margins
and do what MSFT tells them to out of sheer survival instinct,...
now sells Linux preloaded on their machines. Microsoft is selling
SuSE Linux vouchers now in partnership with Novell.
I can understand how separately most folks wouldn't grok what's
going on, but put them together... and it's a damning picture.
/P
In his one man crusade to bring back a dead OS, he has met scorn and total disinterest.
So now he has finally broke, and created several accounts to "back himself up".
It is quite sad really. Is there anything more sad then replying to yourself?
The real OS battle has not yet began and yet you are now believing things that are unreal. So sorry about your deterioration...; but, the Commander_Spock and Crew felt you provided us good entertainment; but, as sad as it is -- when it is time to give up the "key-boards" you have got to do just that in order to uphold your reputation. (Spend plenty of time outdoors, it is Summer). Also, take an hint from Bill Gates because generations Y, Z... might lay blame on you for their mis-education!
Come on, corporate. Switch to Open Office.
- I guess if you can get away with it ......
- by rich015 July 14, 2007 10:04 AM PDT
- Office 2007 adds very little to Office 2003. In factsome of the new features are downright annoying. At best the changes are cosmetic. Some people always want the latest and are willing to pay whatever it takes to get it. I can't figure the attraction but what do I know? I do know that more level-headed people will not pay the very high license fees and will stay with perfectly good earlier versions or migrate to Open Office. The only publisher more outrageous than Microsoft is Adobe whose fees can rival the national debt.
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- I guess if you know nothing about what you're talking about...
- by Fil0403 July 17, 2007 12:21 PM PDT
- LOL, just from your first sentence any actual Office 2007 user can easily see you have never tried Office 2007. In fact, all of the new features are very useful for people who have a brain (and use it). It's rather amusing most people who bash Office criticise the fact that Microsoft changed too many things and you claim the changes are cosmetic at best, LOL. Some people always want something non-Microsoft and are willing to humilliate themselves in public bashing something they have never tried and know nothing about. I can't figure the attraction either, but, anwering your question of "what do I know?", at least regarding Office 2007 you know absolutely nothing, LOL. I do know that more retarded people will not use anything Microsoft and will stay with outdated earlier versions or migrate to crappy alternatives like OpenOffice that don't even offer an e-mail client. The only bashing more ignorant than Office is those comments about Vista, whose comments regarding it can rival Paris Hilton's IQ.
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