What Software Plus Services Means For Microsoft (and You)
With its new "software plus services" strategy, Microsoft is working to compete with emerging SaaS (Software as a Service) vendors while keeping users tied to its flagship Office suite.
At the SharePoint conference in March, Microsoft Chairman Bill Gates defended the software plus services strategy in a question and answer period, dismissing Google Apps tools as too lightweight for serious business users. "They really don't have the richness and responsiveness," Gates noted, "and you can see that relative to the success they've had there."
Few would argue with Gates that Office applications such as Word and Excel have more bells and whistles than Google Docs & Spreadsheets. The question is, what percentage of corporate end-users actually utilize all of them?
It depends on whom you ask. SaaS vendors and advocates claim that percentage is pretty low. According to a a survey of 420 large and small companies taken last month by SaaS consultants at Thinkstrategies and Triactive, nearly 99 percent of companies reported that Office was installed in 99 percent of their corporate PCs. At the 20 largest companies sampled, only 26 percent of the features in Office were being used and that use centered around basic functions in Word, Excel and PowerPoint.
"The vast majority of companies have over-provisioned Office," saysJeffrey Kaplan, managing director of Thinkstrategies, a consulting firm that advises companies on how to use SaaS. "They're either not really using it at all, or they're using a version that's far more than what they need."
That would seem to render silly any cloud strategy holding onto Office as a primary tool. Tom Austin, a Gartner analyst, says he thinks software plus services might eventually be ditched as a priority for Microsoft in lieu of Mesh, a program that allows people to use to Web to get a unified view of their various devices and applications.
"I'm pretty impressed, conceptually, with what Ray Ozzie (Microsoft's Chief Software Architect) is trying to do with Mesh," Austin said via e-mail. "To me, Mesh replaces 'software plus services.' Software plus services was retrograde (looking backward) while mesh is forward looking. Software plus services was about defending the old revenue stream while mesh is about defining a new (and valuable) value proposition."
Austin also made one other prediction: "Software plus services will fall into disuse in the next several months."
