Open Season On Microsoft Office

Earlier today IBM (IBM) threw its weight behind the Open Office project, a move that will give the open source productivity suite some much needed support in the enterprises. And if that wasn’t enough, now Google (GOOG) has upped the ante on Microsoft Office by teaming up with consulting company, Cap Gemini. Cap Gemini is going to help push the Google Office aka Google Apps Premier Edition (GAPE) to the enterprises.

If you consider dozens of start-ups with their own twist on Office 2.0 as potential competitors, then it seems it is open season on Microsoft Office – one of the biggest cash engines for Microsoft (MSFT). The Cap Gemini deal seems to worry Microsoft, notes Mary Jo Foley, a long time Microsoft observer, who writes on her blog:

Today’s CapGemini-Google partnership to sell Google Apps Premier Edition (GAPE) must have struck a nerve, as Microsoft sent out a lengthy and unsolicited response on the deal.

Cap Gemini can help overcome the lack-of-support stigma for Google. A handful of large US corporations have tried out Google Apps in recent past. Large enterprises are getting increasingly comfortable with using software as a service. The success of Salesforce.com and other such offerings are indicative of these changing attitudes.

Still, one has to think of it as a long term attack on Microsoft’s Office franchise. For fiscal 2007, Microsoft Business Division that is responsible for Office and other products such as ERP brought in over $16.4 billion in revenues and had an operating income of $10.9 billion.

In comparison, Google will have sales of over $11 billion for fiscal 2007. Taking that as a backdrop, it seems foolish to suggest that Microsoft Office juggernaut is under any sort of threat. Unfortunately the history does seem to suggest that Barons of Redmond need to watch out.

The commoditization of software has made its impact felt on the server software, web servers, storage servers, and application servers ( J-Boss). If someone was out charging high prices for products, open source and lower cost products emerged and caused rapid commoditization. GAPE is trying to accelerate the process and bring it to productivity apps.


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