The Office: A Changing Environment, But No Changing of the Guard

Sep 09, 2010

Don't sound the death knell for Microsoft Office just yet. Every year or so, someone predicts the end of the Office empire, but it's simply not happening, says "The Next Wave of Office Productivity," released in August by Forrester Research, Inc. However, there is a shift in which tools within the Office suite are used, and are slowly being replaced by other solutions.

"Microsoft has continued to dominate. Even with the fanfare, we haven't seen any big shift off of Office. It's a low-risk investment even if it does have a somewhat high cost," says Sheri McLeish, analyst, content and collaboration, Forrester Research, who authored the report. The question becomes, where do Microsoft alternatives fit in to the current workplace?

According to the report, 57% of small- to medium-sized collaboration and productivity decision makers said they expect alternative productivity tools to be a complement to Microsoft Office tools; 49% said alternative tools will be used as "specialized apps provisioned to specific workforce segments to meet a business need." Only 25% said such tools would be replacement apps in order to decrease license costs.

Some Office competitors worth watching are Corel, which still counts 4-5 million users and is working on improving its SharePoint integration; Adobe, which has been making moves in the collaboration space through; and Zoho, which has introduced both productivity and collaboration tools.

What is interesting about Zoho, notes McLeish, is that "the genesis for a lot of their solutions is internal. Their parent company had collaboration issues, built tools to fix them, tested them, and put them on the market."

The interest in Google thus far has revolved primarily around email instead of productivity, but that might change with the recent launch of the Google Apps Marketplace. The Marketplace allows Google Apps customers to install various business-related tools from third parties in categories like project management, customer management, and accounting and finance. At press time, the top five installed apps were the Manymoon social productivity, project management, and task management tool; Aviary Design Suite; OffiSync, which integrates Microsoft Office with Google Apps; Zoho CRM; and Insightly, a CRM and project management solution. None of these are designed to be Office replacement products, but the Marketplace itself puts Google in a new position as it relates to Microsoft.

"The Apps Marketplace is a real differentiator for Google," explains McLeish. "There are entire businesses built around working with Microsoft. Google hasn't enjoyed that same level of partnership, but this allows Google to not only be a provider of apps, but a purveyor of them. [Businesses can look at the Marketplace and ask] what SaaS solutions are available that might fit my business needs?"

How is Microsoft responding to this? The company is not sitting idly by while smaller vendors chip at its client base. "Consider that Microsoft combined the launch of Office 2010 with the SharePoint 2010 launch. As the value of Microsoft Office as a standalone product wanes in the face of low-cost or free alternatives, Microsoft seeks to position SharePoint alongside Office to deliver higher value to firms by enabling greater automation and synchronization between Office apps like Outlook, Excel, and SharePoint," says the Forrester report.

While the economy has, predictably, been a motivating factor for many companies in making software decisions over the past two years, it's not the only element that has helped to create an environment in which alternative tools can succeed. Employees expect mobile productivity tools, web-based solutions that allow them to work successfully from any location, and the ability to easily collaborate with team members.

Similarly, whereas in the past a user might have Excel spreadsheets not only for business, but also for the household budget or for wedding activities and timelines, there are now web-based tools that are designed specifically for budgets and for weddings. "The notion of a suite gets called into question," says McLeish. "Tools now solve a single issue."

Employees are also less likely than ever to create new documents from scratch. "People aren't writing complete, brand-new documents anymore, starting with an opening paragraph; it's about pulling in pieces of information and assembling a document," McLeish says-logos, headers, footers, and body copy are often pulled from existing documents and cobbled together. While this presents a variety of challenges in migrating content off of pre-existing solutions, it is an important factor when considering how content will be used. It remains the biggest challenge Office alternatives face, however-even a significantly lower cost is little incentive to deal with a nightmarish migration process.