Microsoft updates Office to compete with Google

Microsoft launches an updated version of its Office software today, aiming to keep its grip on the hugely profitable business application market while countering the challenge of free online alternatives from Google.

The world's largest software company is upgrading its popular Word, Excel, Outlook and PowerPoint applications, and rolling out its own online versions to keep up with the new class of mobile, web-connected users that have emerged since the last upgrade in 2006.



Most are expecting the Office franchise - which Microsoft says has 500 million users - to retain its dominance in the business world. But Office could be facing the beginning of an erosion of its "must-have" status.



"Every time Microsoft releases a new version of Office, they get a bump up in revenue," said Toan Tran, an analyst at Morningstar. "But how big of an upgrade is this? They might have a harder time getting people to update."



Microsoft is expected to trumpet a list of improvements on Wednesday, such as editing photos in Word, using video in PowerPoint, collaborating on documents and managing e-mail conversations in new ways.



But the most interesting facet is Microsoft's move into the "cloud" - allowing users to manipulate documents stored on remote servers from anywhere - where Google has been setting the pace.



"They're coming into our playing field," said Dave Girouard, the Google executive leading the company's charge into business applications. "They (Microsoft) have conceded that this is the future and now we think our products and services will get a lot more consideration."



Google Docs - stripped down versions of Microsoft's core programs - are available over the Internet with no need to download software. They are free for personal users and $50 (£33)-per-user per year for companies. Google says it has picked up 25 million users since launching almost four years ago.



That is only a fraction of Microsoft's 500 million, but is growing quickly.



"Word and Excel are pretty secure - Excel is embedded in an uncountable number of business processes, so that would be pretty hard to rip out," said Tran.



But Microsoft faces more pressure in email and calendar programs, the areas most amenable to online and mobile use, where Google already has a strong foothold.



"Google has made a lot of inroads there. Microsoft is going to face pressure there over time. They are probably going to have to cut prices to some extent," said Tran.



That could put the brakes on one of Microsoft's most formidable profit engines.



Microsoft's business division -- which gets 90 percent of its sales from Office - averages around $2.8 billion (£1.87 billion) profit per quarter. That is 47 per cent of Microsoft's total profit so far this fiscal year, second only to Microsoft's core Windows franchise.



Businesses account for the vast majority of that. According to the latest data from tech research firm Forrester, 81 per cent of companies are running Office 2007, compared with only 4 per cent using Google's online equivalent.



A Forrester poll indicates almost a third of existing Office users plan to upgrade to Office 2010 - which will be available to them from Wednesday - within 12 months.



Ordinary consumers get the chance to buy Office 2010 next month, with prices depending on the level of sophistication.



It will take at least a year before it is clear whether Microsoft has a winner and the extent to which customers are migrating to online versions and lessening reliance on installed software.



"Google is not the threat that it will be once the 'virtual desktop' becomes a no-brainer," said Richard Williams, an analyst at Cross Research, referring to the practice of accessing software over the Web. "That's the time Microsoft really has to worry about."

Life and Style
ebookNow available in paperback
ebooks
ebookA delicious collection of 50 meaty main courses
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Recruitment Genius: Technical Support Analyst

    £20000 - £23000 per annum: Recruitment Genius: This Managed IT Services Provid...

    Recruitment Genius: 1st / 2nd Line IT Support Engineer

    £20000 - £28000 per annum: Recruitment Genius: This specialist high tech compa...

    Recruitment Genius: Web Designer / Developer

    £12000 - £16000 per annum: Recruitment Genius: New Full-time, Part-time and Fr...

    Recruitment Genius: Creative Web and UI Designer

    £30000 - £35000 per annum: Recruitment Genius: An experienced creative web and...

    Day In a Page

    On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

    On your feet!

    Spending half the day standing 'reduces risk of heart attacks and cancer'
    Liverpool close in on Milner signing

    Liverpool close in on Milner signing

    Reds baulk at Christian Benteke £32.5m release clause
    With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

    The big NHS question

    Why are there so few new GPs when so many want to study medicine?
    Big knickers are back: Thongs ain't what they used to be

    Thongs ain't what they used to be

    Big knickers are back
    Thurston Moore interview

    Thurston Moore interview

    On living in London, Sonic Youth and musical memoirs
    In full bloom

    In full bloom

    Floral print womenswear
    From leading man to Elephant Man, Bradley Cooper is terrific

    From leading man to Elephant Man

    Bradley Cooper is terrific
    In this the person to restore our trust in the banks?

    In this the person to restore our trust in the banks?

    Dame Colette Bowe - interview
    When do the creative juices dry up?

    When do the creative juices dry up?

    David Lodge thinks he knows
    The 'Cher moment' happening across fashion just now

    Fashion's Cher moment

    Ageing beauty will always be more classy than all that booty
    Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

    Health fears over school cancer jab

    Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
    Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

    'I forgive everyone, but I don't forget'

    Fifa president Sepp Blatter issues defiant warning to opponents
    Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

    Weather warning

    Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
    LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

    High hopes for LSD

    Meet the volunteer users helping to see if it cures depression and addiction
    German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

    Saving Private Brandt

    A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral