Uncommon Wisdom

Apr 19 2011   10:00AM GMT

Microsoft’s cloud-based Office beta tries to reverse losing roll

Tom Nolle Tom Nolle Profile: Tom Nolle

Microsoft made its Office 365 available as a public beta. The “cloud-based” version of Office is targeted at reducing Microsoft’s risks in its critical Office franchise by limiting the damage that things like Google Docs could cause. What it seems to be circling is a plan that would offer SMBs a license for the “collective” parts of Office that are normally hosted on a server, and enterprises a per-seat license for the full Office suite. That’s likely a smart move because SMBs can probably spend the dough for per-worker versions of Office but can’t sustain central server tools. Enterprises are looking at moving some of their less tech-literate workers to cloud packages, and this could stem the tide.

Microsoft’s big problem isn’t Google and the cloud, though, it’s Apple. We’re living in a world where wireless and appliances are redefining how people do just about everything, and Microsoft has let itself get trapped outside the candy store window. Phone 7 just isn’t going to catch up in the mobile handset space, Nokia deals notwithstanding. Microsoft has no effective tablet strategy because it’s afraid of undermining its Windows 7 space. The more iPads Apple sells, the more it turns the consumer away from Microsoft; away from anywhere that Microsoft appears even able to move.

Yes, Microsoft has to protect its current incumbencies, but without creating new ones that matter, it’s only delaying the inevitable. Microsoft won in PC operating systems over Digital Research because DRI missed the IBM PC opportunity. One slip and you’re done. Microsoft missed MP3 players, smartphones, and now tablets. It needs to get its act together–and fast.

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