At Zoho, we have been banging the drum on the coming new era of competition, thanks to the cloud, in software and how that is going to pose a serious threat to the stratospheric 90% operating profits that Microsoft enjoys on its Office suite. And sure enough, the news that Microsoft Drops Prices of Cloud Apps caught our attention. Some excerpts (emphasis mine):
Microsoft has lowered the subscription prices for its cloud computing applications, and has announced new customer wins and broader geographic availability for the apps.
The software giant has lowered the price of its Business Productivity Online Suite (BPOS), which includes online versions of Exchange, SharePoint, Office Communications and Office Live Meeting, from $15 a month per seat to $10 a month.
For Exchange Online alone, its email software-as-a-service, the price drops from $10 to $5. Microsoft also has increased its standard e-mail storage per user from 5 Gbytes to 25 Gbytes …
Still, are Microsoft’s cost cuts enough? Google Apps, by comparison, which includes apps for documents, spreadsheets and presentations, in addition to email, costs only $50 per user per year. Markezich’s response is that Microsoft offers a scaled-down version of Exchange Online, designed for employees who aren’t frequent PC users, for $24 a year, and a scaled-down version of BPOS for $36 a year. What’s more, “we’re not seeing any inclination that Zoho or Google or Zimbra or any other of those offering fake Office capabilities can replace [Microsoft Office],” he [Ron Markezich, corporate VP of Microsoft Online] said.
Wow, wow, wow – Fake Office! That is indeed a badge of honor for us. We just have a polite suggestion to Microsoft: to be perfectly consistent, Microsoft should also label their Bing “Fake Search” – fair is fair, right? For the record, we actually think Bing brings a welcome dose of competition and we certainly don’t think Bing is by any means fake, but with Microsoft marketing terming the entire competitive landscape to their number 1 cash cow “fake”, we have to wonder if that would apply to their own effort at competing with the other dominant vendor.
While Zoho and Google are happily doing update after competitive update to our respective Office suites, Microsoft, with their “real” web office, is not actually making their web offering generally available.
Seriously, the whole “fake office” designation illustrates the main problem Microsoft faces. In their world view, with their quaint “Release to Manufacturing” rituals, the fact that a Zoho user has no CD or DVD to buy, no bloatware to download, nothing to install, simply just visit a web site, log-in (using Google or Yahoo accounts, if they must), and they are on their way to Work.Online, must all feel a bit, well, fake. But take it from us Microsoft: there is nothing fake about browser-based applications, no matter how you wish to keep the world on your “manufacturing” world-view of software, with your proprietary lock-ins and your 90% operating margins.
It is a new world now – I have called it the Google Era of Computing a while ago. At Zoho, we fully grasp this fundamental reality. That is why we are excited about today’s other announcement, this one by Google: Single Sign-on to Zoho, Tripit, SocialWok and more from Google Apps.
As the Google announcement illustrates, cloud vendors are moving aggressively forward to establish a new competitive landscape. While Google is an existential force and a major competitor for Zoho, this new “Google era” also means tremendous opportunity for us.
Thank you Microsoft, for the “Fake Office” moniker. Please await our real launch of FakeOffice.org soon.