The times, they are a changin’ for Microsoft Office.

 
 
I’m trying to see a big picture, and haven’t yet done so. I’ve gotta believe that these two recent events are related:
 
1. March 4: Microsoft announces that it’s discontinuing three of its fledgling Office Live ecommerce services for small businesses:
o  Store Manager
o. E-Mail Marketing Service
o. adManager Service
 
All three services are less than two years old and were offered as extra-cost options to Microsoft’s Office Live (website hosting and shared workspace provider).
 
2. March 8: Microsoft announces that with the release of Microsoft Office 14 in 2010, they’ll release a "free" ad-supported version with ads displayed alongside the workspace. (Read about it.) Presumably this will be a stripped-down version of Office, but that’s just a guess. This will be the carrot that persuades users to pay for a full copy of Microsoft Office.
 
 
What are Microsoft’s plans for Office Live?
I’m sure that there’s a strategy behind these changes in tactics, but I have no idea what it is. For years, Microsoft Office has been Microsoft’s most profitable product, so you can bet they’ll do whatever is necessary to protect its market share. Microsoft started Office Live a few years ago as an online companion piece to Office, to pull users away from Google Docs and Open Office. From what I’ve seen in my year of using Office Live to host my website, Microsoft has done a good job: you can use many Office Live features without having Microsoft Office on your desktop, but to get full functionality, you need to install Microsoft Office on your desktop computer. This allows almost seamless exchange of data between your desktop and the web-hosted Office Live apps, and the desktops of others in your workgroup(s). I think that this is a smart way of selling more copies of Microsoft Office, but . . .
 
Office Live, while very flexible, has appeared to lack cohesion. It’s obvious that lots of developers have been working on various aspects, but it has seemed as though they’re not all pulling in the same direction.
 
Is Microsoft abandoning the market for small business ecommerce capabilities? Are their administrative costs too high to support small businesses? (Many software vendors have never been interested in the small business market: Siebel, SAP, Oracle . . .)
 
It seems that Microsoft may be moving its Office Live service away from offering ecommerce solutions (which have almost no connection with promoting Microsoft Office on the desktop) and toward collaborative workspace solutions (which can promote Microsoft Office on the desktop).
 
I’m guessing that these two events are related in that somebody at Microsoft wants to focus on selling more copies of the cash cow (Office) and spend fewer resources on long-term gambles on a small business market with lower profit margins. What do you think?
 
Visit my website: russbellew.com
 
 
 

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