Microsoft are on the offensive in the battle to remain the dominant supplier of productivity suite software. As we reported last month, Sun, Google and OpenOffice.org will be collaborating to deliver low-cost productivity suite software via the web.
Bill Gates’ response was to announce that in a major strategic shift, future versions of Microsoft Office and related products would be delivered via the web under the banner of Services plus Software (S+S). Called Office Live it looks thus far that rather than delivering Office via the web, all users will get is a bundle of products designed to replace many of the features available in Messenger and Hotmail. While both Sun/Google and Microsoft claim their systems will be financed by advertising, Microsoft’s business model will certainly have secondary and tertiary revenue streams.
The secondary stream is likely to give access to most of the features of Office and the tertiary stream will be the S+S designed to attract corporate customers and premium users. Educational users may be underwhelmed by Microsoft’s new strategy, as they really only want two things; software that is reliable and affordable. Right now no matter how hard Microsoft seem to try, students in particular still think their products are overpriced and have shunned Student Options that was specifically set up to sell them discounted software.
Student Options is a halfway house between traditional software distribution (on CD) and the brave new world of S+S with students paying a low price, but have to download their software. While Student Options has been running as a pilot in select European markets the idea had been to roll it out internationally. While Microsoft are hardly likely to publicly admit that Student Options has been a failure, it has not made any real impact into the huge levels of pirated Microsoft software used by students. Therefore the announcement of S+S probably spells the end of this interesting but flawed experiment.
Microsoft may hope that access to products via their S+S model will help them reduce piracy, particularly amongst students. But in the battle to dominate the productivity suite market in education, Microsoft will for the first time ever, face serious competition from Google/Sun and OpenOffice.
