Have Microsoft blown it? Part II

My previous post this time last week about the future relevance of Microsoft Office, the suite of products who I argued are essentially derivatives of Victorian work practices, was widely read, produced 120 comments on this site and many more through other channels.

A common question was 'what is this new, superior product to Microsoft Office?' The simple answer is there isn't one. Right now I'm writing this in Evernote, an automatically backed up to the cloud, closed source freemium notetaking and archiving service. Earlier today I received a text document via email and a spreadsheet whose origins were in Excel. I've used dozens of other digital tools today and none of them were part of an office productivity suite, or any other type of suite.

I was previously very flattering about Microsoft's brilliant business practice of perpetuating their golden geese Office and Sharepoint (proprietary file format digital documents and filing cabinets respectively) as long as possible to keep license revenue flowing, including their skillful move of the whole workflow to the cloud with their well thought out 365 generation.

As this perky ukulele soundtracked Microsoft video from March demonstrates, the whole show is nicely user interfaced on iPads/ios and the Microsoft way of working and gravy train will keep on rolling. So what's wrong with this picture?

Back in the late 90's Bill Gates was predicting the demise of the qwerty keyboard, to be replaced by speech recognition in ten years time. What actually happened in that 'ten years later' time frame was the advent of the first iPhones and IOS, a foundational shift in the way we live which improbably accelerated Apple to become the most successful company on the planet, using a closed ecosphere 'full stack' business approach, and a merging of voice and the web into one device.

Part of that stack, tied closely to IOS and OS X, were ' iwork' productivity tools such as 'pages' and 'numbers'. Relatively few people use them, in part because Apple hardware, despite its premium pricing, is mostly used as a thin client to interact with online tools, some of which of course runs on Microsoft Azure. The other reason is that the online services and tools rendered those 'on premise' personal hard drive applications obsolete.

Mobile OS updates have a long history of being free, and Apple started also giving OS X Mavericks away in late 2013 to encourage people to stay up to date with the pace of change, using the carrot of shiny new interface features and applications to encourage people to pay attention. You can't fault the Ballmer era Microsoft for keeping the Office golden goose producing revenue while all this was going on: perpetuating the culture of last century 'paper logic' office work was a spectacular financial success.

What's changed and why Microsoft are at a major crossroads (and appearing to be aware of this and going roughly in the right direction) is the end of their era of running the foundational PC based business operating system, and arguably the office productivity tools that were joined at the hip to it. The digital device market is still evolving fast, and while Microsoft have failed publicly and expensively in the first few innings with Windows phones they make huge revenue from Android (and Google's Chrome OS) via various patents.

The challenge is that currently only IOS is making money, with the Android businesses in financial distress (Google profits from it via advertising adjacencies)

This leaves Microsoft somewhere it has never been before: a supplier of software tools that are much less anchored in an operating system and hardware world they own. You could argue this is similar to IBM a t the end of their era of electric typewriter dominance as they bridged to personal computers/word processors. At the turn of the last century PC users waited excitedly for the next iteration of Windows (and by extension Office) to see what new features it would bring to their lives. A cadence of Windows XP cleaning up after Windows ME, Windows 7 saving us from the Vista fiasco, and Windows 8's tepid interest by users hopefully being rejuvenated by the now free Window's 10 has all been a bit of a slog in a desktop world which has changed completely in the digital era.

Microsoft's new ceo, promoting their current mobile and cloud first posture acknowledges this ..."If anything, one big mistake we made in our past was to think of the PC as the hub for everything for all time to come. And today, of course, the high volume device is the six-inch phone".

The question of where Microsoft Office fits into that high volume world for a company that historically copied competition and seemed unable to innovate (the alternating operating system fiascos as an example) is far from clear. Adding to this challenge are the many Microsoft users (some of whom commented on my previous post) who are happy to use archaic versions of Office and won't be upgrading, and the many businesses who are looking very closely at licensing costsand business value as Information Technology mutates and evolves.

For firms with high document employee touch and dated workflows, automation and simplification are highly attractive. Even if their end product is delivered as a document - a proposal, contract or legal position for example - the creation of that entity might have used many of the modern digital collaboration tools. Yes, possibly that might include versions of Office, but equally likely these days other 'Software as a Service' tools, storage and contextual linking of data.

The goal is greater efficiency, and change management to encourage people to modernize their work practices is very hard, as any collaboration community manager will tell you.

When you factor in the considerable license costs of Office against alternatives and the reality that the majority of users are still working in the 1990's style of the suite's heyday, which is a workflow efficiency problem in itself... perhaps you can see why I asked 'have Microsoft blown it?' with their office productivity strategy, and can they remain relevant?

~Image Credit: Jon Sullivan, Wikipedia