Cat5bird Seat

The Server Strategy

The idea of Office as a service sounds oddly familiar. Will it work this time around?

• By Mike Gunderloy
• 02/28/2006

The first time I really noticed this happening with my own clients was when Office 2000 was released and people didn’t see a good reason to switch from Office 97. Some of those people still don’t see a good reason to switch. Meanwhile others have settled on Office 2000 or Office 2002 as their own “good enough” version. All of this has to be maddening to the Office marketers, who, of course, would prefer to have everyone running Office 2003 right now, and salivating for their chance to upgrade to Office 12 in 2006.

Office is a Lonely King
It’s tough being king of the hill sometimes. Office brings in an enormous portion of Microsoft’s profits, and the pressure to continue to deliver those profits has to be huge. At the same time, office suites clearly reached a plateau of maturity about five years ago. Most users never tap 90 percent of the power that’s already in Office -- and with all due respect to the team responsible for the brand new, shiny redesign of the Office 12 user interface -- I don’t believe that’s because users can’t find the power. It’s because users don’t need it. Really, do most business users need to create word processing documents with drop caps? Or do they need to hook speech recognition up to their spreadsheets? If you’re one of the six people who’s been trying to figure out how to create bar graphs inside of data cells in Excel, that feature will sell you the upgrade. For most of us, though, it’s just one more extra that we’ll never use.

Faced with market saturation, the Office 12 team is trying a new tactic: Instead of just selling the Office client applications, they’re pushing hard on selling Office servers. Oh, this isn’t entirely new. You may recall that Office 2003 was marketed as a “system” in part on the grounds that SharePoint was part of the mix. And indeed, SharePoint takes a front row seat in the plans for Office 12, where Access 12 makes an intimate connection with SharePoint for a variety of enterprise data-sharing scenarios. Beyond that, though, you’ll also find the Excel 12 team making a great deal of noise about Excel Services, a server-based tool for managing and sharing Excel worksheets. And of course Project has had a server for several versions now, though it’s only peripherally a part of Office.

The Server Strategy Might Not Pay Off, But...
So what’s the point here? Even if the Office servers end up with four-figure price tags, can Microsoft really be hoping to sell enough copies to help significantly with the bottom line? Probably not. But that doesn’t mean that these servers aren’t important to the Office team. Indeed, I expect they’d be happy to give away copies for free to corporate America in return for the secondary benefits of this strategy. First, of course, these servers will require the latest clients, so they’re a ready-made argument that Office 2003 (or 2002 or 2000 or 97) is not good enough. But the benefits to Microsoft go far beyond that.

Let’s suppose Microsoft comes along and sells the IT department at XYZ corporation on the benefits of using SharePoint for desktop database storage (central control of databases, inclusion in corporate backups and disaster planning) and Excel Services for worksheet sharing (easy browser-based sharing, business intelligence dashboards, centralized storage). These are not, you will note, the ordinary “my office suite has more features than yours” selling points. These are the sort of TCO-oriented features that systems administrators can sink their teeth into. And how many sysadmins would look favorably on the opportunity to get all of those annoying little departmental databases and spreadsheets back under some sort of corporate control?

I see these servers, not just as another round in the feature wars, but as an insurance policy against any future competition for corporate America’s office suite dollars. Suppose Google or Sun or Novell or whoever comes out with a whizbang new office suite that looks attractive on a price basis and that seems to do everything that the average business user needs -- but that this happens after Microsoft manages to get the Office servers entrenched in corporate data centers. Suddenly, document interoperability won’t be enough to muscle in on Microsoft’s franchise. Nope, any new competitor will need a server story as well, plus migration tools that will handle all that data that’s already on Microsoft’s servers. And by the time they can come up with a convincing story, I’m sure Microsoft can raise the bar even higher.

You never know where innovation will lead next.

Do Office servers belong in your data center? Or are you happy with your old comfy office suite? Let me know at [email protected].