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This post was collaboratively written on a wiki by Jeremiah Owyang, who maintains a focus on Customer Strategy and R “Ray” Wang, who maintains a focus on Enterprise Strategy. Together, we’re covering the convergence of the emerging technology, this analysis is also cross-posted on Jeremiah’s blog ^[2].

Microsoft responds to Google- Zoho Threat
Microsoft gets serious about collaboration using the web and its office products. On the consumer side, it’s just catching up to Google Docs, Zoho, and whatever collaboration start-up emerges. On the enterprise side, this could give internal teams real-time collaboration tools –and close security gaps through an on-premise solution. Regardless, IT must develop a collaboration strategy or run the risk of being blind-sided by business units developing it without them.

Microsoft Office Now Web-Based
Enterprises seek unified solutions for web-based applications that complement their desktop productivity tools. Today’s tools often do not work seamlessly across on-premise, on-demand, mobile, and disconnected scenarios. The delivery of Microsoft Desktop Apps just under a year after the October 28th, 2008 PDC announcement in LA puts Microsoft back in contention among corporate user who have been actively piloting alternative solutions from Google, Zoho, and others. Microsoft Office Web apps includes web-based versions of Word, Excel, Powerpoint and OneNote. In addition, Microsoft delivers an online document management system with permissions called SkyDrive, which is advertising supported. These set of features are available to both consumers who have Windows Live accounts as well as to enterprises who have purchased the Office Volume License, who can install an on-premise version on internal serves for intranet usage.

Ray’s Take For the CIO
Enterprises will benefit from a familiar solution that delivers enterprise security and collaboration. For intranet deployments and mobile, there are three key use cases that standout:

1. Secured experience behind the firewall. Microsoft delivers an on-premise install that does not expose corporate data to consumer products such as Google docs.
2. Improved real-time collaboration. Consumer teams can now use these light weight web-based tools for near-real time collaboration. Apparently, this is Microsoft’s first real time collaboration tool, as we know Microsoft Sharepoint often acts more like an asynchronous DMS and CMS.
3. Lighter mobile footprint. Browser based docs give the mobile warrior less resource limitations on laptops or other mobile devices.

Jeremiah’s Take For the CMO
CMOs should be aware of the broad ranging changes of consumer behavior, but should recognize this is just catch up to Google docs which has beginnings as far back as 2006. Despite this “me too” there’s a few distinguishing points that make this announcement stand out:

1. Gives consumers the option over Google Docs. Consumers and certainly stakeholders in B2B prefer the no-nonsence experience of corporate issued Microsoft office. The upside for Microsoft is the spreadsheets appear to have more features than Google sheets, although some of the advanced functionality of web-based excel is not available. As a result, users will have to use the desktop client to perform advanced features like pivot tables.
2. May have better performance –attracting consumers. Microsoft makes claims its service will be faster than the somewhat slow Google docs products, which we believe as we’ve noticed latency in real-time collaboration in Google Docs. (which we’re using for this blog post)
3. Microsoft’s big footprint will accelerate adoption. A research survey ^[3] conducted over a year ago suggests that Google Docs was used by just a 1% of the US consumer base, and Microsoft Word had over 51% adoption. Expect Microsoft’s large footprint in enterprise combined with over 375 million users of Hotmail and Live ^[4]to push these web based apps to the mainstream –expect integration into other MS web products

IT Must Develop A Collaboration Strategy –Or Business Units Will Do It Without You
Enterprise IT must develop a collaboration program, as the advent of consumer collaboration tools will quickly outpace ITs ability to play catch up. As employees continue to create collaborative workspace in the public web, data can become mishandled, not accounted for, or orphaned. To avoid these risks, we recommend that:

1. Enterprises should take inventory of the vast teams using consumer based collaboration tools, evaluate their usage and decide if an enterprise solution should be available for internal collaboration features.
2. IT leadership shouldn’t shut down the firewall and block third-party collaboration tools, as work is often being done at the edges of the company with business units working with partners, customers, and prospects. Instead, focus on providing secure tools within the enterprise for collaboration, then roll-out proper awareness campaigns, training, and ongoing support for company supported technologies.
3. IT departments should be proactive resources to business units and provide them with the right tools, training, and resources. IT departments that are reactive or clamp down on business units needs for collaboration will find employees finding work-arounds on consumer collaboration tools.
4. Enterprises will want to reevaluate how Microsoft Web Apps work within existing volume licensing agreements and enterprise agreements, especially as many have considered alternatives during contract negotiations.

Below are screenshots provided by Microsoft to us of the web-based applications: Word, Powerpoint, OneNote and Excel. It’s not clear if the infamous “Clippy 2.0 ^[5]” will re-emerge –we hope not

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Your POV

Ready to consider Microsoft?  Still attracted to Google from a cost perspective.  We’d love to hear your comments and views.   Reach me direct at r at altimetergroup dot com or r at softwareinsider dot org.

Copyright © 2009 R Wang. All rights reserved.