Microsoft Office Live, Windows Live, and 2006 Ryan 01 Nov 2005

37 comments Latest by Mike Sanders

So, Microsoft’s gone public with Office Live. Their pitch:

Microsoft Office Live will offer you and your employees expert business management applications, such as customer, project, and document management tools, and a security-enhanced private Web site — affordably managed and maintained by Microsoft — where you can work together and share information with your employees, customers, suppliers, and contractors.

Sounds like a few tools I know. The “run your business on the web” space is getting interesting. With Microsoft jumping in the ring in 2006, with our 4 new apps currently in development, and with some other plans yet to be announced, we’re very much looking forward to this battle of the bands 2006.

No one can ignore Microsoft, but at this point they’re just talking while a lot of other folks are walking. The web-based app space isn’t heating up — it’s already been cooking for a while now.

So it’ll certainly be interesting to see how the gorilla of the desktop will attempt to compete on the web when its monopoly power is drastically reduced. The web has leveled the playing field like no other platform ever has. Microsoft can’t rely on the tricks of old and there’s no single air supply to cut off.

Also worth noting is that all the plays seems to be outposts for the Windows and Office duopoly. The announcements were short on hints at Microsoft doing anything new or anything different that might potentially hurt the cash cows. Is this more about playing not to lose than about playing to win?

37 comments (comments are closed)

Jack 01 Nov 05

Sounds like it might be interesting. I don’t really see 37signals and MS competing directly with each other because of their development styles but they’re sure to get mentioned in the same breaths as Office Live gains more momentum.

And while there’s no single air supply, IE is still the oxygen of many companies and home users. They could, for instance, install a whole bunch of widgets into IE to make using Office Live a whole lot similar to regular offline Office.

SpiderMonkey 01 Nov 05

Yes, it certainly will be an interesting time. Unless I’m mistaken, gone are the days when Microsoft can just walk into a new field and be guaranteed to dominate it within a couple of years. They’ve struggled with search, they’ve struggled with music, they’ve struggled with games. It’ll be interesting to see if they struggle again or if their recent reshuffles add some bite back to their bark.

ajr 01 Nov 05

They still own the Flight Simulator market!!!!

Kyle 01 Nov 05

Will this force Google to come out and admit that they’re working on something similar now that they’ve partnered with Sun on OpenOffice? They seem to be rather shy about announcing their intentions. I have little faith in Microsoft doing it right, although admittedly, they’re finally inspiring a bit of confidence with their MS Office 12 for the desktop.

Thank goodness for Google finally bringing the competition to the table to scare MS. It’ll be interesting times, I’m guessing.

Diego 01 Nov 05

If they can include this Office Live, in their Desktop App. MS Office (which is a very ussual practice in Microsoft).. well… It’s going to be difficult to answer in some way to that.

Chris Brogan... 01 Nov 05

I see it as two very distinct offerings: one is a bunch of spaghetti that people “can” use, and that they use probably 4% of all the bells and buzzes, with proprietary output that some folks (like me at home with my Mac and no Office) can’t read.

The other offers apps that are easy to use and effective in their brevity. Personally, I’m already pushing my company to reconsider their MS addiction.

Oddly, I think the trick in all this is Outlook. It’s a huge proposition to get a company ensconced with that product to shift away. But then, I’m all for a good guerilla campaign internally!

Robert Lyons 01 Nov 05

The bottom line factor in this for me is that the only browser that this service works on correctly at this point is IE. I have been developing web sites for over 10 years and there is no way that I could release a web app - to the world - that was focused on 1 browser on 1 platform. This proves yet again that MS does not get it. If they think that by creating a web site that people on other platforms can not see, that those persons will change platforms, they have really missed the boat!

clique 01 Nov 05

Don’t worry, if Sharepoint is any indication, Microsoft has no idea what people actually need in collaboration tools. They’re two years behind technically, and about 20 years behind philosophically.

Chris 01 Nov 05

Heya everyone, long time lurker - this is my first post!

The implications of this post have been at the back of my mind for a while now. I am a big fan of 37signals and all the products and philosophies of less is better.

But at the end of the day when Microsoft can ship a product where a ‘click to share’ button publishes a word document on THEIR web-based hosted solution - how can we compete with that?

Many have said “Yes but this is better than MS stuff” and I agree! But history has shown MS trump ‘better’ with ‘more momentum and tight integration with the OS’. I am not saying I like this trend - I am just wondering how 37signals, or any company for that matter, could possible hope to compete with that. Is there any point in the long term?

I am sure the answer by most will be an idealistic ‘yes’. But seriously - look at Netscape vs IE. Microsoft won through momentum and integration even though they joined the game very late. How is it possible to win over that over time??

Sorry for the rant in my first post :p

funkyrandom8r 01 Nov 05

At the end of the day, it’s THEIR operating system and productivity suite that is installed on the majority of computers. All they have to do is offer some form of synchronisation and web integration and they’re immediately patching a wound which has long been sore in the business community. It totally wouldn’t surprise me if it was written in ruby, and not ridiculously similar to a certain well known and loved framework. Ironically it is a sore that THEY have left open by sheer neglect. But hey, knowing them, theirs will be a vaguely crappy solution that won’t particularly work well or is bloated beyond belief. I’m still getting over the fact that their email clients have ALWAYS stored all their mail in one file and therefore if you get a corrupt email, you lose all your data unless you know a bit about data recovery. Dodge+.

Another Perspective 01 Nov 05

I will be very interested in evaluating it because, unlike some other tools, Microsoft actually listens to customers.

Paul D 01 Nov 05

No matter what Microsoft does, their web apps will always be Explorer-centric. Since I use Safari, I couldn’t really care less what they’re up to.

I’m a new subscriber to Basecamp, and it seems to do just what I need (except for that pesky 10MB file limit).

Pete 01 Nov 05

Paul: Or since you use Safari, they couldn’t really care less what you’re up to. You’re a niche. At best.

Anonymous Coward 02 Nov 05

37, you’re in a good spot. Once MS comes in you’ll be mentioned in the same articles and comparisons and that’ll be much better for you than for them.

Nick Carlson 02 Nov 05

MS is going to provide you guys with a TON of free knowledge to your target market. Microsoft has millions upon millions to of dollars to spend educating the market about this whole “online office” thing.

If you guys play your cards right, you can leverage their efforts for your own product sales. Mwaa haaa haa ha.

You know all that stuff Microsoft has been advertising lately? Yeah, well we offer similar solutions, but are different because of x, y and z.

Bob Dionne 02 Nov 05

If MS is very successful with this won’t it impact Office and desktop sales?

mindful_learner 02 Nov 05

Microsoft’s biggest advantage might be the natural conservatism and resistance to change of the big companies where real big money is to be found. Lots of companies just aren’t going to bother changing to something new, even if it is better. No one got fired for buying Microsoft Office products.

This isn’t necessarily a problem for companies like 37signals. Microsoft will continue to get rich from the big dinosaur companies and 37signals et al. will get money from the small-medium sized business and niche crowds of different sorts.

Matthias 02 Nov 05

4 Aps in development? I’m exited! Please do CRM and expand into the adword business.

William Gaus 02 Nov 05

On a complete side note does 37 Signals have any partnerships with Universities. I think it would make for a cool class or option to manage projects through the use of collaborative software like you offer. Would really give students a great taste of how it feels to manage whne half of your team is off site etc.

That was random I apologize, just came to me as I was reading the posting and spending hours trolling through emails from my fellow class mates looking for attachements.

Darrel 02 Nov 05

The web has leveled the playing field like no other platform ever has.

Unfortunately, corporate management doesn’t get that and still repeats the mantra ‘microsoft, microsoft, micorosft, microsoft…’

Todd Dominey 02 Nov 05

Chatter, chatter, chatter. Microsoft seems more interested in releasing press releases and speaking at conferences these days than developing products.

Yes, that’s a blanket statement, and I’m obviously being a bit of a troll, but the endless cycle of Microsoft’s “me too” announcements followed with “potential [insert product name] killer” headlines in the media is really old. Microsoft needs to put up or shut up, and tap into whatever water line is running into Cupertino these days.

Darrel 02 Nov 05

Microsoft seems more interested in releasing press releases and speaking at conferences these days than developing products.

That’s because corporate managers read press releases and attend conferences. ;o)

Microsoft needs to put up or shut up

Sadly, they don’t. MS never has been about innovation as much as good marketing. In the end, good marketing always beats good product.

Alex Bunardzic 02 Nov 05

There’s one thing about Microsoft that befuddles me: it’s been more than a decade since they’ve announced aggressive plans to take over the world of corporate computing, but so far I haven’t seen any conclusive nor compelling results. Most corporations I’ve worked for or consulted for etc. still run on non-Microsoft platforms and products.

Yes, the clients and the front office type of a deal is purely Microsoft, but frankly, that’s peanuts compared to the killing Oracle et al make in the back-office realm.

I’ve always felt that the real Microsoft wealth comes from the long tail market segment — selling hundreds of millions of Wintels and Office products (the ‘duopoly’) to the households and small businesses, and then cutting off the only air supply and twisting their arms to upgrade. When it comes to big numbers, corporations are just a drop in the bucket for Microsoft.

Is there any conclusive evidence that Microsoft is making a killing in the non-Wintel/non-Office arena? Are they dominating the CRM market? The CMS market? The ERP market? The ECM market? Does anyone see them closing in and bulldozing that segment any time soon?

All I’ve seen Microsoft doing all these years is buying off the competition and neutralizing it. Heck, they at one point went on a shopping spree and bought something close to 200 top brains in the industry. And so what happened to all that brain power? Sharepoint?

But you see, perception is what really matters. As a matter of fact, in the frivolous world of ours, it’s the *only* thing that matters. So Microsoft is raising a lot of dust, announcing radical changes, turn-on-a-dime strategies, yadda yadda yadda. All that is vacuous talk, to brainwash the masses into thinking that Microsoft is the cutting edge, role model software solution company, something that everyone should look up to.

In reality, all they really care about is continuing to coast on the Wintel/Office momentum. Status quo. That’s their bread-and-butter, they’ve perfected that craft, and they’re making, and will continue to make, a killing doing it.

Jack Mottram 02 Nov 05

_Sounds like a few tools I know_

And their new squiggly logo is formally not dissimilar to your squiggly logo. If you squint a wee bit.

Will 02 Nov 05

Kudos to 37signals and others like them for the work they’ve done developing online apps, but it’s naiive to think that Microsoft isn’t going to absoutely DOMINATE their (Microsoft’s) corner of the online app space.

Sure, Basecamp is great and appeals to a lot of small to mid-sized businesses, but I seriously doubt there are a lot of Fortune 1000 companies using anything from 37signals.

The playing field is certainly NOT level just because the apps are online now. Microsoft has brand recognition and customer “loyalty” that all of the other web app developers put together couldn’t even begin to touch.

I don’t think Microsoft’s foray into the space will hurt the little guys, because the boutique shops are offering targeted and specialized apps, not “Office online”, but I certainly don’t think Microsoft is treading into uncertain waters either.

They�ve struggled with search, they�ve struggled with music, they�ve struggled with games.

Because they’ve been up against companies roughly their own size in each category. But with the exception of a few of the beta google offerings, none of the big players are offering online apps yet, so Microsoft can enter the market without strong competition.

Plus, by all accounts they’re not really offering NEW products. They’re taking their exisitng products and making them available with online versions. And their existing products are the industy standards already.

The expectations that Microsoft must meet with this, for everyone besides that incredibly small group of people already developing popular web apps, are minimal at best. The average Joe has no idea how a great online app can function. If it offers more interaction and features than the bank site they’re used to dealing with, they’ll probably be amazed. And those are the exact people who will be using these online Microsoft apps in their workplaces.

The expectations from 37signals and the readers here may be high and may be skeptical, but for the other 99.9999999% of the planet, what Microsoft is doing is revolutionary.

Will 02 Nov 05

I see that their plan doesn’t seem to be their Office Suite itself, but rather support tools. I stand corrected on that point.

JF 02 Nov 05

I seriously doubt there are a lot of Fortune 1000 companies using anything from 37signals.

Actually, there are plenty, but this isn’t our market. Small teams inside these organizations pay for our tools with their own money because the productivity gains are worth it. The software they are forced to use doesn’t work for them.

Will 02 Nov 05

And I didn’t mean to imply that they wouldn’t see value in your products. I certainly wasn’t trying to say that what you produce is small time. But I do believe that many of the largest companies in the nation and the world like doing business with entities of the same size. Not that it’s a good thing or has any basis in quality, but it’s the way business is done at that level. And it’s why Microsoft’s venture into this arena will be successful, because there is an untapped market in the online app field - so far no MAJOR players are in it. And that was my point.

Rahul 02 Nov 05

“Sounds like a few tools I know.”

Unfortunately at first glance I read that as commentary on people, not software. Whoops!

Matt 03 Nov 05

What are the 4 apps you have in development? I know about CRM, what else?

Robert Scoble 03 Nov 05

I work at Microsoft and we use 37 Signals stuff here.

But, the message is correct. It’s put up or shut up time. 37 Signals is doing some of the best software development in the industry today. Even a Microsoft employee can see that. :-)

JF 03 Nov 05

Robert, you just KNOW I want to quote you on that and put it all over our site.

But I don’t think that will go over well on your end. ;)

Josh Petersen 03 Nov 05

Almost 3 years ago I made my first contact with Jason Fried when I called the phone number on the 37 Signals homepage and asked if he’d be willing to do some prototyping work for MSN Search.

When we were done, Jason said “I should tell you about this project management tool we are building”. Anyway, Microsoft had a brush with the future, but the bureaucracy was too thick and the executive class too insular to hardly notice. Probably no one at MSN Search even remembers they paid for 37 signals to solve one of the most unsolved and complicated problems in search. However, I saw the light, quit Microsoft, went to the building of basecamp workshop, hired 37 Signals myself and built a website on Ruby on Rails. Someone at MSN search should be digging up those prototypes - they are still better than anything out there.

sb 03 Nov 05

i’m interested to see how they roll foldershare into the mix. has anyone used foldershare?

Mike Sanders 03 Nov 05

Just want to say that I love your work and writing and want to thank you for all the ideas you have given to the general public.

I wrote on my blog today that I think it is a little humurous when you call out Microsoft. What they need for a product to be deemed successful, at least from a financial or usage perspective, is vastly different than your requirements. That enables you to target a much, much smaller market by leaving out features.

A small point - when people refer to having Fortune 1000 customers it usually means selling it at the corporate level with the associated tough approvals and much higher price tag. Having a small group of users in a Fortune 1000 does not really qualify although technically they are your customer.

I was just wondering how many of the 100,000 users you site are active and/or paying. I know I have at least one inactive account and was wondering if you we’re using any activity metrics in that 100,000 number.

Again thanks for the great work and ideas.

sb 03 Nov 05

“Having a small group of users in a Fortune 1000 does not really qualify although technically they are your customer.”

Why not?

Mike Sanders 03 Nov 05

Because that is not what financial people mean when they talk about having a product targeted at Enterprise or Fortune 1000 customers. The implication of those terms is that it is a bigger money sale.

Some companies do target departments within a Fortune 1000 company, but that would be more like selling to the SMB markets.