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Is Google docs really a threat to Microsoft?

india Updated: Apr 04, 2008 20:27 IST
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Early this week, Google announced Google Docs going offline. With this functionality Google has pitted Docs directly against the Microsoft Office offering Office Live. Is this really a threat to Microsoft, or just noise, or is the start of a new revolution in desktop computing?

Google Docs functionality
Let's first look at what Google Docs is offering. In actual terms, it means you no longer need an internet connection or a desktop word processor like MS Office or other office suites to edit your documents. The browser now becomes your word editor. Until now if you were without an internet connection like on an airplane or commuting to work or when there was an unreliable connection and you wanted to work on your documents it meant you had to save your document and edit in on your desktop using an Office Suite. With Google Docs Offline that's no longer the case. You can edit and save docs and when you get connected save it in on Google Docs. The working of this can be best understood the way Outlook Express works. Here the browser becomes your Outlook and when you connect you can share the document with others.

A threat to Microsoft?
Google Docs is far from a threat to Microsoft, even though a lot has been written about this. The reason is pretty simple. Looking at the big picture, Microsoft's market is very well segmented into the enterprise, SMB and consumer segments. Over 80-90% revenue comes from the enterprise and SMB segments. These two segments also integrate Microsoft's other applications like Sharepoint server, WSS and more. In effect it results in great synergy. How much will Google be able to steal in those two segments? Also really how big is the last segment which Google as of now seems to target?

Specifically talking about Google Docs, even in offline mode, it's far from a complete application. You can't create documents offline. Google Docs is also very basic and is perhaps comparable to a Wordpad and definitely not to an Office Suite.

If you have worked on Office Live, which Microsoft is marketing as an extension of Microsoft Office, it perhaps has better functionalities than Google Docs. Though worth mentioning is Google Docs in an offline mode has given the edge to Google but till such time creation in an offline mode becomes a possibility Google Docs is far from a threat.

The war between Google and Microsoft is on though on record executives don't seem to talk much about. On being asked if Docs being pitted against Microsoft, Ken Norton, Product Manager, Google Inc, said he doesn't see Microsoft as a threat and both companies are with a different set of products.

Cloud Computing versus Packaged Software
Google Docs may not be great as of now but it is definitely a foundation of a huge revolution which is already happening, Cloud Computing. This is where Google is betting hugely and in times to come with a more feature rich Google apps it will also pay dividend.

Microsoft, on the other hand, has traditionally been a packaged software company. It's only recently entered the arena of hosted services which it calls software plus services. The fact remains change at Microsoft is slow and how much it is able to adapt to the new environment only time will tell.

The last word
Is it the end of Microsoft Office? Well, maybe not immediately but looking at the speed at which Google is working one wonders what will happen to its Office Suite. Think of a scenario, which is likely to happen anytime soon. Google makes its Google Docs feature rich by adding more bells and whistles. It also offers an offline creation of documents widget. It combines this with online collaboration, business intelligence tools and a really cool digital rights management tool. Where does that leave Microsoft? Microsoft, even if it wants to, cannot afford free offline creation of documents. It will simply kill its Office Suite and maybe even hurt its other applications. What happens to Microsoft then?

Puneet Mehrotra writes on technology www.thebusinessedition.com