Ah, but what about 2010? That, claim the editors at Smartgrid, will be the year that Google and Microsoft really roll up their sleeves and go to war. In everything from search to office apps and Internet browsers, the two behemoths will roll out fancy new services designed to erode their rivals' revenue streams. "Both companies are largely betting their collective futures on this battle, so the stakes are huge," said industry analyst Rob Enderle. "Microsoft is going to partner and try to starve Google out of content and partners. Google is going to work against Microsoft's pricing model and starve them out of money. Both are, for once, largely going after each other's relative weaknesses and leveraging their respective strengths, so this will likely be a battle for the history books."
This sort of competition is good for consumers. I think only a company with Google's prestige can convince many purchasers of Office that its price point is a relict of the 1990s and the era of shrink-wrapped software. Free is probably not viable (or at least not exclusively), but there's no natural reason that Microsoft has to reap the margins it currently does.
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I've been MS Office free (out of cheapness, not principle) for a few years now and I'm amazed how little I actually need. Basically never. I use Google Docs mainly. Zoho is also good. I actually prefer Zoho on principle since the Zoho guy is so openly libertarian, but I keep going back to Google (who I increasingly don't like politically) since I have no doubt they will still be here ten years from now.
Then again, I used Yahoo's briefcase service for years as an online file store. And they shut that down after a decade.
What I'm waiting for is the onslaught of iPod Touch clones. I hate giving Apple money. I just want a cheap Android or WinMo pocket browser/media player with wifi for about $100.
Each will come out ahead in the area where they've had paying customers. So Google's search engine will continue to beat Bing, since that product is what pays Google's bills. But for personal software, Microsoft knows how to cater to average users -- they would've gone broke if they didn't.
Google has almost no experience there, and it shows in Chrome's tiny share of the web browser market. If the users of your product are getting it free, they can't complain or punish you really hard if you fuck up. That hasn't been much of a problem so far because most people who use Google's non-search products are smart and tech-savvy. But once they try to introduce a complicated product like spreadsheets to the general public -- watch out.
Making complex things user-friendly (again, to the average American) and having good customer service is incredibly expensive, which is why Open Source only works for certain techie geek niches, not for things intended for general consumption.
assman, your comment has nothing to do with the my last paragraph. i'm not talking free. i'm talking bringing down the margins via reducing price points. and the main area of interest isn't in consumer sales as it is in purchases of productivity software for businesses. right now the non-excel spreadsheets aren't as good at presentation (i use open office's calc in preference to excel since it's quicker, but the chart functionality isn't as good). OTOH, i don't think MS word really adds much value aside from the fact that everyone uses it now. word processing programs are way more powerful than they really ever need to be.
I'm not talking about free either, except the Open Source remark. I said "where they've had paying customers," meaning what's their history. Google's paying customers are advertisers, while Microsoft's are the general public.
So for now, Google's culture will be tough to adapt to a broader market, even the broad group of businesses. And Microsoft's culture will be tough to adapt to the narrow advertiser market with its search engine.
Chrome is still early in its development and is already increasing its market share. So I think Chrome is a brilliant strategy by MS - although that may change once Firefox and Safari copy some of its most compelling features.
Personally I find Google Office underwhelming - especially its spreadsheet. But there are tons of competing products (such as EditGrid for spreadsheets). Even Apple is getting into the market with its iWork that has a quasi-functioning beta for putting documents on the web.
As for presentation, check out Numbers (part of Apple's iWork) Razib. It is very nice for presentation. The current version is a tad underpowered and missing some features. But there's to be an expected update in a few months. I think Apple's been making iWork a pretty compelling product. (I use it more and more over MS Office)
although that may change once Firefox and Safari copy some of its most compelling features.
i think that's the point of chrome. ideally it would increase market share, but if it doesn't because its competitors mimic its features that's great for google too. the goal is to make browsers for robust in terms of how they can handle web apps.