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Thanks for Office Live Workspaces, MS

Yesterday Microsoft unveiled the public beta of Office Live Workspace.  Reaction has been mixed, with some positive pieces and some critical pieces comparing Microsoft’s offering to Google Docs and concluding that it’s wanting.

The naysayers are idiots. 

Google, by their own admission, will tell you that Google Docs is a pale shadow of Office’s functionality.  The attraction of Docs is that your documents are online and always accessible.  Oh, and the price is right… free or very inexpensive for small work groups.

Google’s problem is that the world is composed of Microsoft Office users.  These are by and large people who value the rich capabilities of a desktop productivity application.  Google is asking them to trade the value of that environment for another unrelated value — collaboration and online hosting.

Nobody will argue that collaboration and online hosting aren’t valuable.  I myself use all kinds of tools to share documents with colleagues today.  Google has to answer this question for me:  Why should I give up a familiar and powerful suite of tools just to be able to share documents?

Microsoft has answered it by adding collaboration and online hosting of documents to Office with Office Live Workspace.  They’ve said "have your cake and eat it too, Alec". With Office Live Workspace, you can easily create workspaces with project planning templates, documents, spreadsheets, presentations, and more.  You can track changes and add comments.  You can even easily share your desktop with up to 15 more people for collaborative editing and presentation.  It’s as if you combined Google Docs, Basecamp and a screen sharing solution and made them all accessible from any Office application, all the way back to Office 2000.

And it’s free.

It’s a brilliant counterstroke to the Google Docs hype. As ValleyWag said "Office Live Workspaces makes Google Docs look like Google 20 Percent of Microsoft Office". The Silicon Valley community that thinks otherwise has been breathing their own rarified air for far too long.  The real world doesn’t work the way they think.

{ 7 comments… add one }

  • Geoff March 5, 2008, 1:01 pm

    Alec,

    First the criticism – I cannot take seriously any post the references ValleyRag :)

    Second the comment – I agree completely with any and all who argue that GoogleDocs provides but a shadow of the functionality of MS Office.

    But…for those who have read The Innovator’s Dilemma, doesn’t the comparison between the two fit absolutely perfectly with Christensen’s description of disruptive technology? I believe it does. Furthermore, I think the folks in Redmond believe it too. Watch their strategic movements over the next couple of years with that framework in the back of your mind and see if it doesn’t appear that way.

  • Alec March 5, 2008, 2:33 pm

    😉 fair enough Geoff. I have to admit that having Valleywag make the most cogent comment about the whole thing was pretty humorous.

    Vis a vis the Innovators Dilemma, the comparison works in as much as Google is coming to market with a much simpler and cheaper solution. That’s also where it falls apart. The Innovators Dilemma is, in large part, about how a simpler solution with a much lower cost of manufacturer can disrupt a more powerful existing solution. Yet we all know that the incremental marginal cost of software is $0. Is it a coincidence that so far we haven’t seen a real Innovators Dilemma disruption in software… is it possible the model doesn’t work in that environment?

    AND… You are most probably right that the Redmondians are thinking in terms of the Innovators Dilemma. When the book was published in 1997, I bought copies for all my staff at Microsoft and encouraged them to read it.

  • Geoff March 5, 2008, 8:00 pm

    If I were feeling less lazy I would actually sit and read through the book again before I insert foot. That said….

    My understanding of the central thesis was not relative to manufacturing/marginal cost, rather in the cost to the consumer.

    Existing technology continues to upgrade (innovate) in an evolutionary manner disregarding the requirements of the market. Eventually, the product has capabilities that far exceed the needs of the average user. (what percent of the features of Word and Excel do the typical user utilize?) Nonetheless, people keep using it because it is the best way to meet their needs.

    Meanwhile, the disruptive technology is introduced, but it is so primitive that it cannot meet the needs of most users (GoogleDocs anyone?) So it putters along with its own series of evolutionary upgrades that everyone pretty well ignores. Until one day….someone looks again and realizes, "hey, this does everything I need without all the extra bells and whistles that I never use. AND IT'S FREE!!!" Commence disruption.

    As for a disruptive software case, could we argue that the Open Source movement has been disruptive on various levels? Apache, Asterisk, MySQL, Audacity, FileZilla come to mind.

  • Clair Boyd March 6, 2008, 12:30 am

    I agree with Geoff. I totally loved the Innovator's Dilemma by the way. Disruption is what's happening to Microsoft now. GoogleDocs, Basecamp and more innovative guys like Wrike.com found their own niche of customers, who were not previously using anything, but now they are ready to embrace the new technologies.

  • Chris March 6, 2008, 12:15 pm

    Great post Alec. Christensen also advises firms that are deploying disruptive products to not insert it into a market where there is an incumbent motivated to defend it. By targeting business users, Google seems to be doing exactly that. Now, here they are being compared to the product they are trying to disrupt, and falling woefully short.

  • Alec March 6, 2008, 2:25 pm

    Geoff, I’m probably going to regret that statement that we haven’t seen a real Innovators Dilemma disruption in software ;0 You provide some decent food for thought as well. But let me decompose your examples a little:

    1. Asterisk and Audacity – I think these are disrupting hardware competitors. The disruptor isn’t really software, but rather the PC itself. Every PBX is software plus a hardware platform. The innovation is in bringing software to a general purpose computing platform. I think the same thing is true of digital editing suites and mixing boards — the precursors to Audacity. To me, these are both part of the same disruption wave that Microsoft is riding, which is the PC wave.

    2. Apache and MySQL are undoubtedly cheaper, but I think of them as open source competitors to established products. Remember that Apache and Microsoft’s IIS, for example, are the same vintage. Both went after the same untapped market, which was web servers, and the effect of both were to cannibilize Sun’s expensive proprietary hardware. I’d argue, again, that these are still riding the PC wave.

    3. Filezilla is interesting as a tool, but again, secure FTP is simply an incremental improvement. The most valuable improvement in FTP for me has been the introduction by Microsoft of graphical FTP in Windows Vista.

    Because software is “just bits”, I don’t think it’s like other kinds of disruptible industries. I think the real threat to Microsoft is not an Innovators Dilemma threat, but rather what Clair illuminates, which is a network effect. Once a lot of people are using Basecamp, for example, to manage projects, it becomes difficult to displace them precisely because the tool isn’t vulnerable to the same techniques that were used to displace PC tools. Microsoft’s only defense is to pre-empt those companies before they gain critical mass…

  • Geoff March 6, 2008, 8:04 pm

    With my apologies Alec – I really should be more gracious and let it go!

    I agree with you in your assessment that the primary disruption occurred in the delivery of a widely accessible hardware platform. People could take this ubiquitous, wide-open platform, slap in whatever code they could dream up, and completely displace the incumbent players. But why? Because of the cost. People wouldn't have left mixing boards and PBX systems if the cost to the consumer had been equitable. (I'll resist the urge here to run off on a tangent about the disruptive nature of moving our spreadsheet/word processing code back off of the PC…)

    Now, the to the disruption in software… In pointing to those open source projects, I should have been more clear in my explanation. I wasn't trying to say that Apache was a disruptive code base by virtue of the way in which it delivered web pages. Rather, I believe that open source creation of software is disruptive to proprietary models of software creation. Obviously, this is not always true, but I tried to list some examples where open source software had displaced the incumbent, proprietary, players. In those cases, the open source software wasn't very good when it started, but it evolved and eventually became "good enough" to displace the paid model. Almost no one today would buy Windows Server just for its ability to function as a web server. If you need to serve web pages, the free product is more than good enough. Open source development has usurped proprietary development in that space. It is no longer a viable commercial space. Just like, as pointed out by Christensen, manufacturers of 5 inch hard drives no longer have a viable commercial space.

    I'll close with a question, and promise I'll not bother you further! Do you think we will be installing Microsoft Office 2015 on our local machines because, let's face it, the on-line free junk that Google offers simply doesn't meet our needs?

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