From: technews <technews@ou.edu>
To: "'it-fyi@listserv.ou.edu'" <it-fyi@lists.ou.edu>
Subject: it-fyi: Microsoft Working On Internet Version of Office (NY Times
Date: Tue, 5 Oct 1999 10:06:00 -0500
October 2, 1999
Microsoft Working On Internet Version of Office
By REUTERS
SEATTLE -- Microsoft Corp. is working aggressively to develop an
Internet-based version of its market-dominating Office software but has not
yet decided how to price it, a company executive said.
Lisa Gurry, an Office product manager, Thursday denied a published report
that the software giant would make an announcement at next week's Internet
World convention in New York about plans to offer the new version on a
rental basis as well as for sale, possibly by the first quarter of 2000.
``We're looking at a couple of options, including working with partners or
making it available direct from Microsoft,'' she said. ``We're not
discussing any pricing models or any pricing specifics yet.''
The plan for a Web-based version of Office reflects an Internet-driven
industry shift away from sales of shrink-wrapped software or even annual
licenses and toward ``application services'' offered over a network.
Microsoft executives, under pressure to articulate a coherent Web strategy,
have embraced the services model, which allows customers to buy only the
software they need and to outsource much of the costly installation and
maintenance.
``We need to build the platform that lets software move to the services
model,'' Microsoft President Steve Ballmer said last week.
Microsoft has become increasingly vocal about plans for an Internet-based
version of Office since rival Sun Microsystems Inc. announced in August
plans to give away similar software for free.
A Sun executive said 500,000 users have already downloaded free copies of
StarOffice, and he said a free Web-based version would be widely available
in the spring through Internet service providers.
Brad Chase, a Microsoft vice president for Internet operations, said last
week the Redmond, Wash.-based company planned to offer an online version of
Office over its new bCentral business Web portal, but not for free.
``It will happen probably sooner than you would expect, not in the far
distant future,'' he said, declining to be more specific.
Industry analysts are divided on how fast a transition to Web-hosted
applications will occur, with some expecting more than half of all software
to be run off a network within three years. Others expect the method to be
used more for specialized back-office applications like accounting and
lightweight applications like electronic mail and calendaring.
``I still think the primary method is going to be delivery by PC for
corporate and home office users,'' said consultant Scott Winkler of Scott
Winkler Associates.
Microsoft has in the past fended off aggressive challenges from low-priced
rival products to maintain the dominance of Office, its biggest source of
revenue after Windows with an estimated $5.5 billion in sales last year.
``Just because you change distribution channels doesn't mean Microsoft
necessarily loses its dominant position,'' said Scott McAdams, president of
Seattle-based brokerage McAdams Wright Ragen.
But Microsoft executives clearly are grappling with how to price a Web-based
version of Office without endangering a critical source of revenue.
``The hard part is to figure out what they're going to charge for it,'' said
Rob Enderle of Giga Information Group. ''That's a very political process and
fraught with all kinds of difficulties.''
Microsoft executives have said they will work with Internet service
providers and other third parties to offer the Web-hosted version of Office.
One possible provider is Web hosting giant Verio Inc., but a Verio spokesman
said the company had no agreement with Microsoft to provide Office on a
rental basis.
He said Verio does plan to offer Web-based extensions of Office 2000
beginning early next year that will allow its customers to take advantage of
new features, such as one-click publishing of Word documents onto the
Internet.