I received a press release from those great people over at Zoho this morning. The release went like this;

February 18th, 2008 ‘Office 14’ to be more Web-friendly, but will it be wallet-friendly?

I just came across this article from Computerworld quoting Bill Gates that ‘Office 14′ will be Web-friendly.

“Microsoft won’t provide the full functionality of Office online, but it will offer limited online capability for viewing and editing the data in Office applications. It already does this for its Outlook e-mail client with a product called Outlook Web Access, and it will offer similar capabilities for other applications in Office 14, Gates said in a speech at the Microsoft Office System Developer Conference in San Jose.”

I guess, Microsoft seems to be feeling the pressure from online office apps. I am glad to see them adapt to the change on the application side. I guess the next step for Microsoft will be to adapt to the new pricing model for productivity apps – FREE.

These productivity applications have been around for years and don’t you think they should be commodity by now? Paying $400 for an office suite made sense when the price of the desktop/laptop was $5K. Now the price of the hardware has come down to $400 and we still pay $400 for an office suite. On top of it, there is a new version every two or three years asking for an upgrade (of features/$$$?). Maybe someday we’ll see a model like Web apps where “All upgrades are included”.

What do you think? Shouldn’t productivity apps be commodity by now?

Now readers will know that I’m a 100% believer in SaaS applications being the way of the future, but one line in Raju’s release rung slightly less than true. Raju says;

I guess the next step for Microsoft will be to adapt to the new pricing model for productivity apps – FREE.

The reality here is that it simply isn’t viable for an application to be delivered for free, but by a for profit organisation. Either developers need to go down the open source route (which I’m not discounting at all), or they need to find revenue streams outside of software licences or subscriptions. Google apps might seem "free" but holistically it isn’t – users are paying by accepting Google advertising on associated Google services. And clearly this is the challenge for SaaS vendors and Web 2.0 generally. I remember an email I received from a colleague a year or so ago – he said;

But I still struggle with that whole Web 2.0, show me the money thing

At the moment we’ve got a mass land grab for eyeballs with very little thought about conversion of those eyeballs into monetized services. It is for this very reasons that quite potentially the Telcos, with their existing platform plays and true monetization models might just be the sleeping giants who surprise us by doing well n this 2.0 battle. What do you think?

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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