Can Office 2007 Prevail In A Web 2.0 World?

Microsoft partners are ready to roll on Office 2007-based apps and integrations.

Tim Huckaby, CEO of Interknowlogy was on stage front and center at the official launch Thursday, showing off work his company has done with Scripps Research and various Office 2007 goodies including SharePoint 2007.

Partners like Huckaby are thrilled at the opportunities provided by this massive lineup. To borrow a Microsoft term, this product wave includes not only the Office core client apps—Word, Excel, PowerPoint--but Exchange Server 2007, SharePoint Server 2007, and the upcoming Office Communication Server, PerformancePoint Server. On Thursday, Microsoft CEO Steve Ballmer promised more than 30 related or ancillary products will roll out in the next year.

For all-Microsoft shops this may be good news if partners can persuade them the new lineup can help them eliminate servers, streamline processes, etc.

But with the hype around software-as-a-service and Web 2.0 "mash up" applications, there may be some push back among other companies, who prefer not to lock-in so much of their IT budget to a company that is not seen as the leader in these areas."Not too long ago Office 2007 was competing against the older incarnations of Office. But in a fairly quick period of time -- much quicker than a typical Microsoft product cycle -- the competition has shifted toward Web 2.0 and rich internet applications. There is a lot of developer, ISV, and SaaS interest in these applications and services, and that will diminish some of the third-party energy for building to Office 2007 front ends," says Dana Gardner, , principal analyst with Interarbor Solutions, a Gilford, N.H.-based researcher.

Of course, Microsoft thinks it has its Web 2.0, mash-up ducks in a row. Corporate Vice President Chris Capossela acknowledges a certain "Microsoft-is-not-cool" perception among some quarters.

"All the buzz is Web 2.0 type things. We think we're delivering a lot of those cpaabilites on the Web but the press is all about Web 2.0 and mash-ups. We deliver on the Web and within businesses," he told CRN after the Thursday event in New York.

"We think SharePoint inside the company does Web 2.0 but with adult supervision because you get the blogs and the wikis but there are can be controls. Then if you want to do it on the Internet, you can use our Live properties, Windows Live Spaces, Office Live for sharing documents across the Internet," he noted.

On the more traditional Office clone/competitor front, Capossela says the OpenOffice/StarOffice duo hasn't made much of a dent. "We've faced lots of threats that people said would torpedo our business," he said.

Jonathan Edmett, vice president of sales for Solutions Consulting Group, or SCG, a San Diego-based Microsoft partners specializing in custom app development, CRM and ERP implemenations, said he expects 20 to 25 percent of his company's customers to move to Office 2007 in the next year or so. "Several are now in beta. We can also help customers see how Office lights up new features and functions," he said.However, even Microsoft die hards acknowledgethat Linux lives in its accounts of all sizes. And there are solution providers on the open-source side of the divide who say OpenOffice is a real and viable alternative to the Microsoft Office juggernaut. Especially as customers really scrutinize their computing needs.

Jordan Rosen, CEO of Lille Corp. built his company's business around providing alternatives to the Microsoft stack—up to and including the Office applications.

He maintains that the last release of OpenOffice has taken care of concerns about document portability between OpenOffice and Microsoft Office. "There is no strong need any more for advanced document conversion. You can create a codument in OpenOffice and save it as a Word document for the handful of people who absolutely need that. Ditto for spreadsheets,' he noted.

Lille has a lot of customers in the medical and healthcare field.

"I can only speak for my guys in the healthcare area. From the largest organizations you can think of down to the smallest medical practice, the vast majority of spreadsheets or documents are completely simple enough to run on Open Office," he noted.He said early customer concerns around a single vendor support contact have eased, he noted. "That support question is no longer as big a deal as it used to be. If it ocmes up, I ask the customer how many times would you call Microsoft about a Word question?"

That apparently does the trick. Dr. Martin Echt, president of Albany-based Capital Cardiology Associates, is bullish on Open Office for philosophical and economic reasons.

"I have convictions about the market. As Milton Friedman—who just passed away—said, 'We want choice in the market.' Microsoft did not permit Open Office files to be read by Excel just because they didnt' want to. That's not giving people choice," he notes. "Then the second reason is money. The average fee to keep a computer updated [on Microsoft] is $50 to $100 per year per computer. At 100 PCs per year that's $10,000. For Open Office, we pay our yearly support of something like $500 a year total. So the cost is much cheaper. I wouldn't mind paying significantly higher costs, but this is 10 percent or less of what Microsoft charges."

Capital Cardiology continues to license Microsoft Office for a small number "ten percent—of employees—those who need the full-boat Microsoft Word or Excel capabilities.

Even Microsoft partisans say the company's licensing continues to be a hard sell, and the upgrades themselves can be onerous.Licensing is the area of greatest push back, says Huckaby. "Face it, it's not cheap although many customers have Software Assurance or enterprise agreements so they've already bought it."

That, however, leads to the second hurdle: Actual deployment. "Let's be honest, this is not a tiny application even on the client side. It's a huge application and you can't upgrade an entire enterprise and 300 to 500 megs of program over night. You have to update servers and that can bring the networks to their knees." Huckaby says.

Tech savvy IT shops will train users on a group or department basis and while that's happening, image their computers, Huckaby noted. "They don't just install Office, they re-image the whole computer, wipe the local drives clean and re-image everything so they don't have to worry about weird DLL conflicts with third party software."

He estimates the cost of this work—either done in house or by an infrastructure partner—at $50 to $100 per desktop above and beyond license cost and any customization work.

For more on the Microsoft partner perspective on Office 2007 opportunities, see CRN on Monday.0