Posted by: Stephen Wildstrom on September 18, 2007
Things are not going well for the colossus of Redmond. The European Court of First Instance has upheld a $613 million fine for antitrust violations. Now IBM, which Microsoft drove whimpering out of the PC applications business several years ago, has joined the growing list of companies and open source efforts mounting ever more threatening attacks on Microsoft’s lucrative Office franchise.
IBM announced today that it was reviving Lotus Symphony, a productivity suite originally built around the dominant Lotus 123 spreadsheet, as a free download for Windows and Linux users. The new Symphony uses the Open Document Format standard, which governments are increasingly requiring but which Microsoft is resisting fiercely.
Microsoft Office is so deeply entrenched in large businesses that it can probably never be blasted out. These enterprises have invested in customizations that cannot be transferred to alternative programs and the cost of recreating them is prohibitive. But these same organizations have shown great reluctance to upgrade to Office 2007.
For everyone else, the alternatives are worth a look, whether they are full client applications like Symphony, OpenOffice, Corel Word Perfect, otr Apple's iWork '08 for the Mac, or such Web-base programs as Zoho, Google Apps, or ThinkFree.
While the combined market share of the alternatives is minuscule today, they are a long term strategic threat to Microsoft. The Office business has long accounted for about half of the company's profits, and while the cash cow will go on producing, it is increasingly difficult to see where any growth is going to come from.