Microsoft Office versus Google Docs

25th January 2010

There was a time when Microsoft had it all its own way, but now there is robust competition in the Microsoft Office space.  FSN senior writer, Tony Crowhurst looks at what is available to business from Google and other vendors.

It’s a business that generated revenues of $18.8 billion, one that is jealously guarded by its owners whilst being seen to be fair game by the competition. That operation is Microsoft’s Business Division (MBD) where 90% of the revenue is contributed by sales of Office products. MBD revenue has been flat over the last couple of years with consumers showing greater reticence to spend money on Microsoft Office products.

Getting users to upgrade has always been a problem for Microsoft – it has faced the problem of “it’s good enough for me” for so long that it has become a real dilemma. In past this did not matter as larger businesses tended to have multi-year licensing agreements with Microsoft which ensured that revenue was maintained. The recession and the increasing acceptance of cloud applications have meant that these organisations are delaying or paring back what they pay Microsoft. For Microsoft, it’s irritating enough that companies stick with (for example) Office 2003, but the issue is that they are starting to follow consumers in favour of Google Docs, OpenOffice and other cloud vendors such as Zoho. Once lost, those customers will be difficult to convert back to Microsoft Office.

Microsoft is not going to walk away lightly and is betting that it can retain the business customer with more flexible product offerings such as subscriptions rather than outright purchase and also through the launch of web based versions of Office due out with Office 2010. Microsoft will also make sure that its cloud versions of Word, Excel and PowerPoint are priced competitively and will certainly spin the advantages of staying with Microsoft Office. Stripped down free consumer versions tied to Windows Live may also help to keep users on board.

For consumers making the switch to another type of word processing software or spreadsheet is easy - for businesses it’s a more difficult decision. Organisations rely on Excel to a great extent for reporting, data analysis and budgeting and forecasting. PowerPoint is ubiquitous and Word is still the mainstay for corporations. Unfortunately by pandering to all users Microsoft Office has become perceived as being too complex. Where Microsoft wins in depth of functionality, it also looses in ‘feature bloat’.

For customers with enterprise agreements (EA’s) it is worthwhile evaluating what you’re paying for and certainly they need to look at a mixed environment depending on what a user requires. The numbers are not insignificant – enterprise agreements with software assurance can cost hundreds of pounds per user – for an organisation with 1,500 employees that’s a big outlay.

Organisations that are coming up for renewal also need to be clever about the timing of licensing agreement renewal dates. Delaying or only renewing for a shorter period can have significant costs implications. Furthermore purchasing upgrade rights included, say, with Windows XP has limited benefits and may be costly if there is nothing you want to upgrade to.  

Yes, you may need Office 2010 for some users however; if most of your users communicate via an email application do they need the depth of functionality that lies in Office? Google Docs is a more polished offering now and simple features such as the ability to have real-time collaboration inside the browser are phenomenal. Users who have taken the gamble have been surprised by how useful it is to be able to work with multiple users at the same time and if all your staff is not in the same office it certainly speeds up the working day.

This level of seamless collaboration has not yet been matched by Microsoft – multiple versions with revisions and tracked changes emailed around to all are still the method. Also, even though there will be online access to shared documents, there are still question marks about how Office Online customers will be able to work on documents simultaneously.

It is not all bad news for Microsoft - Office 2010 and specifically Excel with its integration into SQL Server definitely provides value for money when compared to other database vendors and is an area where Google may struggle to compete. Excel has become the de facto standard for end user access to corporate performance management solutions and even Microsoft’s competitors have given up attempting to seduce users away from Excel. Migrating complex spreadsheets to (e.g.) Google sheets is not an easy proposition and Microsoft will be counting on that fear. That does not mean it won’t happen and certainly if you are starting off as a new business Google is developing credible business intelligence with its tie in to Panorama and although this article covers Office applications in the main Zoho (http://www.zoho.com/) offers not only the Office applications that we all need but also a wide range of business applications.

So, what is the answer? Once again it’s never black and white...

If you’re a small organisation currently using Microsoft Office and are happy then stick with what you have. Office 2010 may be appealing but participate in a trial first to see if it is really worth the cost. Also, evaluate Google Docs – especially the collaboration features.

For medium and larger organisations you will probably have a deeper relationship with Microsoft and you definitely need to look at minimising your Microsoft Office costs by not upgrading all users. Check how much your EA costs you and whether you need software assurance. If your EA is up for renewal – look at a 1 year renewal rather than three years and look again at evaluating the competition.

 

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