Cloud computing has grown exponentially in popularity and scope in the past year, and now Microsoft Corp. is making its grandest salvo into this new frontier by putting its extremely popular and profit-making MS Office software packages online.
Microsoft Corp. is the biggest software company in the world, and its Office software, including Word, Outlook, Excel, and PowerPoint, are some of its most profitable offerings. They are also some of the most widely-used programs in the world, as open-source office programs such as OpenOffice have never made much of a dent in MS Office’s strong customer base. However, that dominance is mostly in the PCs and notebook area—the mobile platform has been largely neglected by Microsoft until now.
Formerly, MS Office programs could be used on mobile devices, but it would necessitate installation and updating that can be time-consuming; the software also eats up memory and can freeze up less powerful devices. Now, these programs will be available in an online format that users can access from a wide range of devices, such as PDAs and smartphones. All that is required is an internet connection to access and use their documents.
It is a reaction to Google Inc’s web-only office Google Apps programs, largely offered on the mobile phone platform to fill the vacuum created by Microsoft’s heavy software and poor compatibility. Google’s web-only programs have enticed a small yet significant portion of Microsoft’s corporate users away. The enticement factor is in the cheaper prices and the lack of software installations. Moving MS Office to the cloud is an excellent strategy: Microsoft allows its users to access all the benefits and features of the software programs, without the tedious downloads and updates.
Industry insiders agree with Microsoft’s move. “It’s obvious that Microsoft has to do this if they’re going to remain competitive with Google,” Michael Yoshikami, who is the chief executive of YCMNET Advisors, a money management firm. “It’s something they have to do.”
The market responded positively to the announcement, which was made on Monday, July 27. Shares of Microsoft stock rose almost 4% on Monday, which was the biggest gain made by a stock during a single day of trading since September, 2010. This stock jump is partially influenced by the hopes that Microsoft can eventually increase their profit margin by expanding their dominance of the office software field by jumping into the cloud.
“If they execute effectively and it’s adopted, it could be a game changer,” Yoshikami commented. “Whether or not that will happen is a whole other story.”
Microsoft has actually put out online versions of a few of their Office staples, such as the Outlook mail program, for its corporate users for a few years, and in 2010 they extended that in free Outlook versions for home users, too.
Chief Executive Steve Ballmer is set to present an overhauled and updated set of offerings — collectively called Office 365 — at an event in New York City on Tuesday morning, underlining the company’s newfound online focus.
The software packages will be updated and re-vamped for online use, and the whole thing will be called Office 365.