Microsoft Office on AJAX

Microsoft Office has for a very long time now been the bread and butter for the company (after the Microsoft Windows franchise, it is the only line in the company that is actually making any money) and the bulk of the revenue has come in from annual licenses that it’s customers fork out painfully year after year. This opinion piece examines the viability of an alternative model which may serve as a win-win for both Microsoft and the legions of Office users the world over.

The model:

Microsoft Office (or maybe the core applications of Outlook, Word, Excel and PowerPoint) ditch the annual licensing that drains the life out of its corporate and individual users and go for a web-browser based AJAX version that matches features and elements that the users have come to love over the years supported by an advertising platform that pays for its upkeep.

The current pain in the collective necks of the users:

1. The software is a pain to install, maintain, upgrade and patch.
1. You’ve been there, each time you install a new component, Office prompts for the dreaded source-CD or installers. You make a mad dash to your stash of CD’s and can’t find it at the time. You finally cancel the install and Office remains as-is without the feature needed or the patch applied.
2. Its just too darn expensive.
1. $400 is a LOT of money for a productivity software. Its almost thrice the cost of an OS and one fourth the cost of a new laptop!
   
3. You love the software, but hate the fact that all your data is locked up inside your system.
1. and is a pain to share (no pdf support), a pain to own (virii and worms target you)
4. For some the fact that it is closed source implies the existance of much less than perfect code
   

For Microsoft, convincing users to upgrade to the latest version is a multi-million campaign and not often successful (remember OfficeXP? Many stayed on to Office 2000 Smart Tags and what not)

The competition:

StarOffice, OpenOffice (the non-SUN version), a couple of firefox-extensions, CorelOffice, Abiword. Powerful competitors pitting their might against the reigning champion Office, each with a business model of their own. Most notably recently Google has put in a set of its developers on the StarOffice platform. The competition has been examined, and cross-examined to death before and will not be repeated here.

The numbers indicate:

1. for a typical home user, ad driven revenues start at about $9.0 per year
2. for a Home-Office situation, ad driven revenues are at about $100 per year
3. for an Office-worker, ad driven revenues are at about $160 - $200 per year
4. and for a typical student, ad driven revenues are at about $60 per year
   

Based on an extremely simplistic model (4 banners/min, 5 cents/100 banners, 4 banners), the numbers suggest that an ad-driven model clearly does not match existing license-driven model (compared to say the cheapest $80 per year for a Student license), but there are some interesting patterns that one can draw from here:

• This model may be extremely interesting to a new entrants, particularly the OpenSource guys (think Google+StarOffice)
• Existing small players may be the quickest to move to such a model (Abiword?)
• Value additions in the form of disk-space on the Web tied along with these features will definitely attract users through genuine need-fulfillment (a true office on the web, regardless of where you are)
• Parallel plays with other third-party service providers plugging in (like Extensions in Firefox) will set the application on fire
• Web 2.0 plays integrating with an AJAX model (tagged documents, RSS document feeds etc.) will liberate legions of users wanting to organize their meta-data and distribute stuff
• Ability to truly collaborate with multiple teams in multiple locations (think a massively online community working on parts of the same document, like a Office-Wiki) will liberate users from the drudgery of having to distribute, update and maintain versions
• Finally for Microsoft it makes sense to truly bring this on the web as it ties-in very well with its existing line of products (Office Share Point Server) as this is exactly what it wants users to do internally in their Organizations.
• The AJAX model will probably have to be complimented by a ‘cached’ AJAX-office that users can use while they are traveling or are not online
• The dreaded DRM from Microsoft extends easily to such a model, adding the possibility for another revenue stream amongst others

Like this piece or got feedback for me? Write to me at BlogRamble .

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