The reaction to a previous post – Rethinking Office – has been interesting. Quite a few people have argued that Microsoft won’t make an online version of Office available until they absolutely have to, because it will destroy sales of the full product. It makes sense to protect the full product, given it contributes a third of total revenue (generating a nice $4.7bn in the last quarter). But I think it’s a mistake to assume that an online version of Office will cause Office sales to plummet.

I’m not a Gartner or Forrester and haven’t conducted a huge amount of research here. But with the 100 or so customers I have talked to during the past 12 months, not one has the remotest intention of moving all of their data into ‘the cloud’ any time soon. Privacy, compliance and security concerns are the top 3 reasons, closely followed by reliability and speed (or lack) of Internet connections. They want to be able to do some work in an online environment but not everything. That’s why I think Microsoft is crazy not to plug this gap now, whilst it is still so immature. The only people likely to switch completely to online tools are those who almost certainly aren’t paying for the product anyway. But demand for online capabilities is beginning to grow. The collaborative features provided by Google Docs is gaining traction within education – i.e. the next generation to enter the workplace. People are looking for tools to publish docs online – as being demonstrated by the popularity of tools like Slideshare and Scribd (acquisition prospects?)

Not only does Microsoft give the impression of ignoring demand for online features, they are not doing a great job of promoting what the products can do for business. Here’s a simple example. I am currently building a new portfolio management system for a small financial services business. Their information-working habits have barely changed in the past 10 years. A simple review of their current processes and it became obvious that we could reduce their administration overhead by approximately 25%, all but eliminate the potential for errors, and do analysis to highlight business development opportunities. How? Automating manual processes and calculations. What with? A combination of Access, Excel and Word. Access will hold the database, forms and reports. Excel will be used to create a performance dashboard and real-time summary report. Word will be used for mail merge (currently completed manually – there’s the first fix)

Target return on investment (ROI) – 6 months.

Why use Office? Simple. I can use macros and VBA (Visual Basic for Applications – built into Office and therefore doesn’t require specialist developer tools) to automate as much of the data entry as possible, including workflow-driven forms to manage business processes and automatically generate client letters pre-populated with data. Data validation rules will capture and correct anomalies. By building the solution inside of Office, the administrators will still have access to all the other standard features. For example, they can create queries, ad-hoc reports and custom mail-merges (such as creating a targeted newsletter) without requiring me or another technologist to come in and do it for them at cost. I don’t have to second guess every possible requirement and charge them for developing features they might not use as much as they initially think. The user interface is consistent and familiar-ish (I’ll be spending half a day with them to help acclimatise to the new ribbon system), and, to save my bacon, is Microsoft’s responsibility to support. I can concentrate on making the forms, reports and processes as user-friendly and intuitive as possible. The programmability side of the application is a lot more mature and secure (especially macros) than in the 1990s.

There isn’t an online alternative to rival this capability, yet. The nearest appears to be Zoho. They are building online versions of traditional software applications covering just about every type of information-related activity you can imagine. Last week, they announced support for macros, programming and advanced functions such as pivot tables. The barriers to adoption? The reasons already given for not wanting to go fully online, product immaturity and lack of a partner network to help implement and customise the service. That’s probably going to change.

What’s interesting at this moment in time is the growing perception that Microsoft isn’t focused on software any more. Perhaps in part because of the news coverage. Steve Ballmer is the CEO and all he talks about is… Customers don’t know about the benefits offered by new versions of Office. They’ve never seen the visualisation features within Excel. They haven’t heard of Office Business Applications. Some still haven’t heard of SharePoint. And some that have don’t really know what it means. They can’t find examples to relate to or events to attend that might explain it all (‘Too techie’). They don’t notice the ‘people-ready’ adverts, different to the ‘realising potential’ ads from last year and the ‘dino-heads’ from the year before. They can recognise an IBM advert, just show the blue borders and they can recite their favourite line: ‘…so who’s responsible for getting this fixed?’. They joke about the PC vs Mac ads. They’ve seen an iPhone (Windows Mobile? Not so sure). They do know Microsoft is competing with Google and was trying to acquire Yahoo…

Anyone remember the scene in Jurassic Park, where the park warden explains the challenge of avoiding Velociraptor? You focus on the Raptors you can see up ahead. The one you didn’t spot comes in from the side and eats you.

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