Weekly Update

Will Microsoft move fast enough to hold onto its Office point position?

A number of news items from last week that converge toward a major scene of contention for how works gets done in the near future:

  • Editorially, the markdown coediting tool, has announced that it will be shutting down on May 30 2014. Apparently the company just wasn’t seeing the growth that they had hoped for. I reviewed the product in Editorially is the co-editing solution of my dreams, and my experience in using it with others was not great. Writing new documents from scratch seemed to work fine, but otherwise, real problems. Or one single problem. As one participant said, ‘If I can’t import and export Word documents, it’s impossible.’
  • Microsoft and DocuSign announced that DocuSign will be rolling out an integration that will allow Office 365 users to send, sign, track, and store DocuSign documents without leaving the application, and keeping all the documents within OneDrive for Business (formerly SkyDrive).
  • I wrote about Google’s new partnership with VMWare (The Office Wars intensify as Google brings Windows apps to Chromebook), which is an attempt to make an end run on Microsoft’s apparent unwillingness to roll out full-featured Office apps on anything by Windows.
  • This last week, Dropbox made another strategic hire (see Dropbox makes Dennis Woodside its first COO), gearing up its attempt to take the high ground in the Office wars.

Microsoft Office applications — particularly Word, Excel, and Powerpoint — have become central to the work graph in most established businesses, and are extremely common even in younger and less Microsoft Windows-dominated businesses.

It’s essential, however, to think about Office docs in two ways:

  1. Office as a protocol, specifying the layout and semantics of the elements that make up these documents, such as tables, text styling, document layout,and so on.
  2. Office applications, which are apps capable of creating, editing, and saving documents that accord with the Office protocols.

In this perspective, Google and Apple both have tools that can act as Office applications, since they can — to some degree of fidelity — input and output Office documents. (Although what Google does with my Apple Pages-created invoice files are a travesty.)

The situation today is this: Microsoft has not released Office applications that play in full fidelity across all mainstream platforms, in particular iPad and Android tablets. Their solution for Mac OS involves buying (or renting as a part of Office 365) a full install of Office for Mac, which is a fairly heavyweight solution considering I already have Pages, Numbers, and Keynote installed, and they are now free for anyone buying new Apple hardware.

Dropbox has said it is investing in a broad spectrum of applications to better compete for top-of-the-hill in business. And Google and Apple are investing serious bank, as well. And all three are going to make the economics of Office very difficult for Microsoft: it’s trending towards free.

Microsoft faces the Innovator’s Dilemma: if it doesn’t disrupt its own dominance in Office apps, then one or more of these three competitors is likely to upset the marketplace with a nextgen suite of Office apps that provides a better value proposition at a lower (zero?) price point. For example, imagine this Office Killer from Dropbox:

  1. Very high fidelity interoperability with Microsoft documents, like tables with calculations within ‘Dropdocs’ Word-like word processor.
  2. Tight seamless integration with Dropbox file-sync-and-share capabilities.
  3. Close integration with a Dropbox work management capability, which I am dubbing ‘Droppr’. This would provide both inside and outside the document discussions, annotation, and review tools (compare versions, show who wrote what, etc.), as well as more general work management, like discussions, following, projects, and activity streams.

Note also that Box is likely doing similar things.

I rest my case by asking the question a slightly different way. If Microsoft fails to rise to this challenge, every month more people are drifting away and adopting alternative tools that eat documents based on its protocols, and if something like the Dropbox Office suite comes out before Microsoft moves to offer something similar, then they could lose a major battle, and maybe, in the long run, the enterprise battle.