Microsoft: Office as a service is a non-starter

Microsoft will deliver future versions of Office as software, not as a service, and as complete packages, not modules that deliver incremental updates.

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Microsoft will deliver future versions of Office as software, not as a service, and as complete packages, not modules that deliver incremental updates.

That was the message of Jeff Raikes, president of the company's business group, to the Morgan Stanley Technology Conference in San Francisco last week.

Discussing Microsoft's plans for Office, Raikes said, "for the core of Windows and the core of Office, the most sense is to have them on a fairly predictable wave," said Raikes. "Most enterprises expect us to pull all the components together and thoroughly test them.

"They would rather have us do that than stream a lot of little changes out on an ongoing basis, because that makes their lives miserable," he said.

Raikes was responding to questions from analysts about whether Microsoft can successfully compete using traditional methods of development and distribution when it faces competition from the likes of Google and other companies that deliver software as Web-based services that can be upgraded incrementally - and often.

"It's the most efficient way for us to deliver value to the customer," Raikes argued. "[But] we can add enhancements on an ongoing basis."

Rob Helm, an analyst at Directions on Microsoft, said it is unlikely Microsoft would make a u-turn on Office's format or how it's sold. "Microsoft's most interested in getting people to upgrade," he said. Office Online, he said, was the route the company has taken to convince users to move up. "There are a ton of templates and how-to articles there. Microsoft's trying to get people to use features in the most recent versions, to encourage them to upgrade."

As for online delivery, Helm said Microsoft's strategy is to come up with complimentary services, not mutate Office into online applications. "Even Office Online has some, like a calendar-sharing service. It's free, unlike Office Live, and its purpose is to encourage people to use the most recent version of Outlook," he said.

Outlook 2007's calendar can be shared using Office Online. Previously, an Exchange server was needed to publish shared calendars. "We might expect to see more of that," said Helm.

Raikes conceded that Office is under pressure from developments such as Google's Apps Premier, a $50 (£25)-per-year per-seat hosted online application bundle that debuted last month.

"What must be scary to Microsoft isn't the idea of wholesale replacement of Office [by enterprises], but that there are lots of people in an organisation who just don't need Office and who can get along with something like Google or OpenOffice.org," Helm said. "If that catches on, an enterprise might drop their Office site license. That's when it becomes a serious threat."

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