Microsoft's Office Head Talks Google

CNET: Stephen Elop Believes Businesses Will Continue To Pay For Productivity Software

(CNET)  This story was written by CNET's Ina Fried.

Stephen Elop is convinced that even in a world of free, browser-based productivity software, consumers and businesses will continue to pay for Office.

Microsoft will bow to reality with Office 2010, adding browser-based versions of Excel, Word, PowerPoint, and OneNote. But, in an interview this week, the head of Microsoft's Business Division says that there is still plenty of life in the full version.

"At the highest level, what we're able to put forward to our customers is not just the best productivity experience, but one that spans the PC, the browser environment, the Web environment, services, and so forth, and the mobile device," Elop said. "So, it's the best productivity experience across the PC, the mobile phone, and the browser."

At its worldwide Partner Conference on Monday, Microsoft will give people a feel for how this works and is expected to start broader testing of the first piece--the desktop applications.

As for Google, Elop said that most businesses still think of Google as a search company or are just kicking the tires on Google Docs. He shrugged off the fact that Google this week brought the products out of beta.

"I've heard that the word was dropped," Elop said. "I didn't notice that anything else had changed. So I don't know if the software suddenly got better, or they just changed the name."

He also said it is too soon to have an opinion on Google's just-announced Chrome OS.

"We haven't seen it," he said. "We don't know anything other than what has been written in a blog."

In a wide-ranging interview, Elop shared more views on Google as well as his perspectives on Office, business software, and the broader economy.

What are customers asking for from Office? What's the most common thing that large businesses ask you for when you're talking to them about Office?

Elop: You know, when you boil it all down, everything we do essentially in the division, when you're with a CEO or a CIO or whatever the case may be, the base conversation is about productivity. It's about how can you help me solve this problem, and that problem often is about the productivity of some aspect of their business, of something they're trying to achieve competitively, or whatever.

Certainly in today's economic setting, cost savings comes into it. How can you help me save money in getting what we need to get done? How can you help me solve these problems, but do so in a more cost-effective way?

You mentioned cost savings. How is the business environment relative to investment in software and other technology compared to, say, when we spoke in February?

Elop: You know, when we spoke in February, I think there were a lot of people who didn't know what was going on.

I think people may not agree as to what's going on in the economy right now. Everyone has different opinions. But at this point people have opinions. And because people have opinions about what's going on in their business or their part of the economy, on that basis they begin to make plans. The plans will be different than the plans they might have had six or nine months ago, but they can actually establish a plan, and therefore a budget, and decide, OK, in our business we're going to do this, we're going to invest in these ways, and so forth. I don't want to say there's increased confidence as much as there is less ambiguity in people's minds. They've decided what it means to them.

Now, at Microsoft, you've heard Steve (Ballmer) talk a number of times about how we view what's happened as being a reset in the economy, that it's not a bounce back to the way things were, but things have reset, and things need to stabilize here even more, and then we'll see things begin to grow as increases in productivity in the economy kick in.

The product lineup that you guys are going to have going into next year, what does that add to your arsenal, particularly Office 2010?

Elop: I think at the highest level, what we're able to put forward to our customers is (not) just the best productivity experience, but one that spans the PC, the browser environment, the Web environment, services, and so forth, and the mobile device.

When people look at Office 2010 in the broadest sense, and that's both the client applications, it's the services offerings, it's the server products, it's the Web applications, all of those pieces together. Certainly what customers are recognizing as they've had pre-briefings and the early experimentation with the products is that we're at some form of generational shift into this world of software plus services, and Office 2010, I think, is surprising people as it relates to the extent to which we've fully embraced software plus services.

How do you see the balance of Web applications and desktop programs? You guys have obviously talked about it's not just about putting Office in the browser. What are the kinds of things that you think are best done via the browser, what are the things that are best done in a desktop program, and how does that inform sort of the way you guys have designed those two products?

Elop: First of all, it's helpful to look at specific scenarios. I'll just use a personal example. I was at my parents' home recently, I needed to edit a document, I hadn't carted my PC around with me. I had my father's PC connected to the Internet. I was able to use a Web application to quickly look at a document, make some lightweight changes, and pass that document along without interrupting the fidelity of the document, being a part of the collaborative experience with others at Microsoft. There's a specific scenario where the Web application played an important role.

Similarly, if you look in the mobile environment, there are scenarios related to, for example, taking a picture as part of some work that you're doing. You're unlikely to take a picture with a Web browser, or a notebook computer.

The second part of the answer, though, is that while there are specific scenarios that are best advantaged within each of the different ways of delivering our technology, the best experience comes from the combination of all of those things. So, we think less about the Web applications as standalone word processor things, and far more about it as a complement to the trio of the phone, the PC, and the browser environment. We think about the best experience being the sum of those things working well together.

Your preference, and certainly the way you guys are investing in the Web applications, is as an adjunct to the desktop, not a replacement. That said, how common do you think it will be that businesses license just the Web applications for at least a portion of their employees?

Elop: Well, we hope that it's very common to the extent that there are, let's say, workers in a business (where) today a company has said, look, there's one PC for 100 employees on a shop floor, or something like that. To the extent that they now license those workers for a lightweight browser experience in some way, shape, or form, and they're now part of the Office family, that's a positive thing for us. It brings them into the whole environment of productivity that we're trying to deliver.

So, those scenarios we think will be relatively common. It could be factory floor workers, it could be retail employees, and outlets around the world, and there are all sorts of scenarios that we think have been under-served from participating in the productivity experiences that some of these applications will serve to support.

I guess the other piece of that question is whether you expect that there will be a portion of customers that attempt to move some part of their workforce that has access to desktop Office to just browser-based versions?

Elop: I mean, by definition there will be some. Do I think it's a huge proportion? No, I don't. And the reason for that is because, particularly in that we're talking about the commercial setting, where we believe that the productivity experiences that we deliver in the rich client applications, with the Web applications as a complement to that, is still going to be a compelling experience that people are going to be saying, hey, I want people participating, for example, in collaborative editing of documents, in collaborative sharing of PowerPoint presentations, as examples.

For example, our multi-user authoring feature. There are examples like that which we believe represent improvements in productivity for these customers that are delivered through the rich client application. So while you'll always be able to point to some examples of someone somewhere making that decision, we don't believe that's going to be the dominating force.

How often do customers bring up Google apps in meetings, and is it usually when you're talking about the product, or when you're talking about price?

Elop: Customers are aware of Google in different ways. Sometimes just from a search perspective, sometimes they're aware of things like Google Docs and so forth. And our experience is it may lead to a discussion around what is software plus services, what is Microsoft's view on it. And the tendency is not, obviously in our conversation, to dwell on their price versus our price, or things like that, because it's two very, very different things.

When you put side by side, for example, the full range of on-premise and in the cloud services like Exchange, SharePoint, (Office Communications Server), and so forth, the full range of rich client applications and soon Web applications and so forth, combined with many years of enterprise support, of an understanding of how we're going to take care of mission-critical capabilities, it's a whole different conversation. And so that's why in the context of a large-scale customer who is engaging these things I think there's tire kicking, or they may look at these things, but there's a clear understanding that... enterprises have some very specific and far-reaching requirements that Microsoft over many years has figured out how to deliver.

Well, they're out of beta now, is that a significant move?

Elop: I don't know. I've heard that the word was dropped, I didn't notice that anything else had changed. So I don't know if the software suddenly got better, or they just changed the name. I couldn't interpret what it meant.

As someone who has been in this industry a long time, what do you make of Google's announcement that they're moving into the operating system realm with Chrome OS?

Elop: Well, let me just challenge the premise of your question. They've announced a couple of times now that they're moving into the operating system business, because there's the whole Android thing, and now there's Chrome.

We haven't seen it. We don't know anything other than what has been written in a blog. So it's very hard for us to know, without seeing what they're doing, to comment on it.

You have architected part of Office 2010 to run in the browser-based Office Web apps. If I'm not mistaken Chrome isn't one of the supported browsers, but it might, in fact, work in Chrome. Do you guys see Chrome as an important browser to develop for?

Elop: It depends on how you define important. From a market share perspective Chrome is very low. So I think we're driven by customers on these things. There are other browsers that have greater market share, and that's where we've concentrated our first efforts.

[sjc_1]

Google and SUN have Open Office in JAVA. It takes a while to load, but it is a decent alternative. What you see with Microsoft is a continuing effort to gain monopoly positions in a world that wants open systems.

[Slrman]

Like GM, Micro$oft is operating with their head in the sand. OpenOffice nicely works for MS office and is free (openoffice.org) and There will be an Operating System come out that will blow Windows out of the water. Maybe not Google Chrome or Linux, but something. Wait! It's already here. Mac OSX, like all earlier Apple OS software is far, far ahead of Windows, which has only copied it for almost 30 years, now.

I have an iMac and not only is the software cheaper and better, but I can run any Windows program I like. How long will it be before Apple makes it available for installation on PCs? The Mac already uses Intel processors, so maybe the clock is running out for MS? About time!

[ajapierce]

I wish they would stop this articles about micrsoft. Micrsoft is at Death's door because they are losing their grip on reality.

Windows Vista was a total failure, and now they are boasting Windows 7. All it is, is a version of Vista that's less annoying with "Allow or Deny" for every stupid little change you make.

It's no wonder that years after Vista was released people are still sticking with Windows XP, and Microsoft Office 2003. Why? Because peopel can understand how to use both of those products without going crazy with all the bugs in Vista, and Office 2007.

Hey Microsoft, that's for turning the keypad on the ATM Machine up-side down so people have to use some retarded piece of software.

I am not impressed with Office 2007, total waste of money and resources. It's the exact same thing as Office 2003? Why is that? For those of us who hate the stupid menu changes with the billion buttons to push, you can make Office 2003 compatible with Office 2007 files by downloading a simple file format converted pack that allows to create, edit and change office 2007 files.

How is it that a little add-on pack to Office 2003 could allow you to do everything Office 2007 can? It's because it's the same stupid product with the same code, but more confusing buttons to mess around with.

Look at Office 2004 for Mac, identical to Office 2003. Look at Office 2008 for mac, it to is also identical to Office 2003 with the same menu setup. Because MAC got some balls as said, don't give us that garage called Office 2007. Amen!

[itgranny]

I just bought Office 07 this last week. I finally broke down because I'm the company's designated geek and was no longer able to help those with the newer computers.

One of my employers asked me to put a ppt together for him in a hurry yesterday so i had a crash course in the new ppt. I was NOT impressed. They think that the menus with a zillion buttons that take up half the screen are a better way to go and there is no option to use the "classic" menu. Also, the default pptx files now have trouble downloading from an online link after uploading to ftp. There may be a solution for this but I haven't had time to do the research to figure that one out yet. But, i feelings are that it used to have that functionality, for a product that's getting better, it seems to be going backwards.

I built a new machine with Vista Ultimate last Jan. for myself. I hate the address bar even still after 6 months. How long do they figure it will take for me to get "used to it?" I've also been trying to figure out how to share my vista machine's media drive with the computer in the living room. Forget it! it seems a lot of people are trying the same thing and most are failing just like me.

Adobe is in the same boat as microsoft. Over priced and incompatable with the last versions. Corel needs to stop cowering in the corner and start coming up with some real inovation. It's frustrating when you put Illustrator artwork up against Draw's and can't tell the difference (except Illustrator took half again as long to do as corel) but you take Draw projects to the print shop and they tell you to go away. And then adobe comes out with a new version every year and expect you to pony up several hundred dollars minimum to be in compliance.

And to top it all off, we spend thousands of dollars on this stuff and then they turn around and charge us again for their help desks. They make their help files vague and lousy for a reason. it helps them continue to bring in $$$ even after the people have purchased them.

These software companies have got a racket going. It does make me wonder how they'll fare with the economy in the ditch. Hopefully there will be some rising stars that will give them some real competition.

[buffalonyusa]

Haters. Rock on MS. Sure, your stuff is full of bugs (due to the immense amount of content), but it's getting so pretty and I can't see myself ever not using it.

Why is it ok for crappy Apple to come up with pretty, but useless $hit and everyone loves it? Better marketing maybe?

[Slrman]

Obviously, you know nothing about Apple computers. Their stuff works better, their hardware is of higher quality, and what exactly is useless? You're just another MS zombie that cannot see the facts when they are nibbling on your butt.

I've used PC's and Macs side-by-side for decades and am a retired IBM employee. I can say that, anyone using a PC when they could have a Mac just doesn't know anything about computers.

[whitemale08]

What makes Bill Gates or anyone, for that matter, believe that we can have a viable economy based upon everybody 'making sandwiches' @Subway and surfing the internet?

We have to rebuild the FOUNDATION or our economy which is real manufacturing of products for infrastructure, water systems, nuclear power systems, high speed mag-lev public transportation systems.

Then we can hire college kids to create computer games and software interfaces like Windows.

Computers and services like 'flippin' burgers @McDonalds' are the luxuries of a good economy not the economy itself!

PULL YOUR FACE OUT OF YOUR _SS AND GO BACK TO WORK TO REBUILD AMERICA NOT MAKE MORE CELL-PHONES WITH STUPID UNNECESSARY FEATURES.

[ayatoldya]

Microsoft is a lot like GM. It will continue to build its Hummer versions of products even though its customers really want a Kia version. The result is MS products will continue to be way over priced.

Sun offers today a far better suite of business products than Microsoft at a substantial lower initial cost and even a far cheaper total cost of ownership.

Linux based applications are mature and have innovative features even MS Windows 7 hasn't incorporated yet.

Microsoft has to learn that its consumer base is more educated and realizes there is More and Better choices out side of the over hyped and marketed brand of Microsoft.