October 9, 2006 4:00 AM PDT

'Office 2.0' start-ups knock on business doors

Attempts to unseat Microsoft Office look more likely to come from an army of ants than from one giant foe.

Several start-ups are developing online services that handle tasks people typically carry out with desktop applications like those in the popular productivity suite. And at the Office 2.0 Conference, set to start in San Francisco on Wednesday, many of those companies will show off their latest crop of products.

One company, SmartSheet.com, is launching an upgrade to its online collaboration software, which is built around a hosted spreadsheet and e-mail. Instead of just mimicking Excel in online form, the company is using familiar tools to make project management better, SmartSheet's president said.

"We're trying to create a combination between the paradigms we all know (with e-mail and spreadsheets) and, where we get the benefits of Web 2.0 collaboration and improved processes," said Mark Mader, president of SmartSheet, which is based in Microsoft's home turf of Seattle. "We're not falling into the camp of simply replicating what there is today online, which doesn't improve things all that much."

Workplace use of Web 2.0--the use of wikis, Internet delivery of applications, and Web-enabled collaboration--is the key way these upstarts hope to distinguish their products, as they try to chip away at Microsoft's franchise. Another benefit they tout is that using hosted services, rather than buying applications, can work out cheaper for customers--or at less expensive up front.

In perhaps as significant a differentiator, many Office 2.0-style companies are steering clear of the traditional sales route used by Microsoft Office. Instead of trying to sell directly to IT managers within corporations, many of these smaller companies, which admittedly have limited resources, are looking to spark grassroots adoption by pitching their products directly at the worker who will be using them.

SmartSheet.com

In a model shown to be successful by Salesforce.com, many hosted productivity applications aimed at businesses are cheap enough to be purchased using a credit card by individuals within a company department.

Paul McNamara, CEO of online services start-up Coghead, says that it's not just the viral marketing aspect of the backdoor sales approach that appeals to him. One of the ideas behind Coghead's approach is to let technically savvy end-users gain more control.

"There is a real groundswell for do-it-yourself Web applications, empowering people closest to the business problem to build the solutions," he said. "A lot of people see the Web delivery model and Web 2.0 as a key enabler to end users."

On Wednesday, Coghead plans to launch an open beta, or test version, of its service, which lets technically savvy people build their own workflow applications. It intends to launch its service in the first quarter of next year and to charge a monthly subscription fee.

Service providers as power brokers
SmartSheet's Mader previously worked at Onyx Software, a provider of customer-relationship management applications, where he saw firsthand how individual business users can have an impact on corporate decisions.

In one situation, Onyx was ready to close a large deal endorsed by the customer's IT department. But that decision was derailed at the last moment by people who were going to use the application.

"Teams will make decisions--if they see value, they will move. We had a wonderful plan, and business (people) overrode it, because they were bringing in the business," Mader said.

SmartSheet charges a monthly per-user fee, with a basic service starting at five users and 50 viewers. The viewers can see common documents and update them, but not author new documents.

Being quick and easy-to-use encourages people to try a new Web application. At the same time, however, it makes it relatively simple for them to try an alternative.

See more CNET content tagged:
Onyx Software, Web 2.0, Microsoft Office, collaboration, decision

6 comments

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This article states in part; "Rather than expecting...
... an outside contractor to check a Web site, an e-mail-based form is sent to that person, which automatically updates common documents stored at SmartSheet.com...." While this method is all well and good, will not e-mail based methods be too slow in the world of real-time collaboration... thus giving way to the "INSTANT MESSAGING" (IM) built infrastructures. Besides, what will convince users to move to 'Office 2.0' startups when 'Office 2.0' startups may not be in a position to deliver on the more "sophisticated" and "composite" based application needs of some companies.
Posted by Captain_Spock (894 comments )
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It is just a begin
The large penetration of PCs with MS operating systems has pushed many companies to a very individual approach. In the days before 1980, a lot of information was stored on paper, but in a way, that it was accessible for many people. The pC has pushed many workers to store projecrt related information in personal work space, even if it is on a centarl server.
This causes inefficient work methods, a parge amount of multiple storage of documents, very often in all kinds of versions.
Collaboration is demontrated in wikipedia, not as the last ideal.
I think project based multiple access data storage should have become common 20 years ago. It is my conviction, that MS has pushed many usres in the wron way, especially with sucg preprogrammed maps as "my pictures", my documents etc. I always store (also personal data) in a project organized way.
Posted by gerben49 (8 comments )
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Starting Fresh
"From a product-design point of view, many Office 2.0 companies are starting fresh." We see with our customers (which are a combination of SMBs and functional heads of sales, HR, and legal) that the appeal for our Office 2.0 product is really about leveraging the internet to provide a product that doesn't fully exist in their current MS and other suite. Using EchoSign for example to extend Salesforce and Word through to getting customer contracts signed, or extend an HR system all the way through to the offer letter, takes the office beyond where it can go (at least in an automated fashion) in the pure client software world.
Posted by jason lemkin (4 comments )
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for Office you pay 1 time fee...
for Office 2.0 you have to subscribe on montlhy basis. as long as you have broadband, you can colaborate in real time. i only see these websites useful for people that have slow internet or old pcs that are not easy to upgrade.
Posted by wayland.ind (20 comments )
Reply Link Flag
No One Time Fee
MS office has to be upgradede every 3 years or so.
No one time fee.
Open Office is completely free of any charge, version 2.0 is OK.
Posted by gerben49 (8 comments )
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