Jun 2, 2010

Although some believe Google Apps has just now sounded the battle cry for desktop applications, Microsoft may already have won round one.

Whatever happened to the next wave in enterprise knowledge management, the one that was destined to disrupt old business models and leave behind a new world of collaboration-based tools? It shouldn’t be any surprise that when the tide subsided, Microsoft Office remained standing right where it was.

In the evolution of every class of tool in human history — the washboard, the six-pounder cannon, the oil lamp, the flint knife — there is one common element: It was rendered obsolete by the sudden and welcome appearance of something better, more efficient, more adaptable, more relevant, more practical. Marginal improvements to a tool — anti-lock brakes, Touch-Tone dialing, the “mute” button — typically take longer to phase in. Despite all efforts devoted toward evangelistic offensives, markets have more difficulty embracing something that’s slightly better than something that’s obviously better.

Case in point: Microsoft Word. You may not recall that Word spent the first ten years of its existence languishing behind WordPerfect, whose place in the workforce throughout the 1980s (at least among smaller businesses that had adopted PCs and the first LANs) appeared unshakable. This despite the fact that with Word, you could actually see italic text as italic (albeit with a special switch), and make swift corrections using on-screen menus that guided your keystrokes. Most every businessperson to whom I demonstrated Word versus WordPerfect during the ‘80s declared Word easier to use.

Yet they kept buying WordPerfect, in gross, which often made my life as a business consultant difficult; I was the one touting ease of use and adaptability. The most common reasons my proposals for migrating from WordPerfect to Word  were rejected (mostly by big law firms and wildcat oil drillers) remain imprinted on my mind:

  • Everyone else uses WordPerfect. If we’re going to spend good money blazing a new trail, a driller once told me, it’s going to be something we can market and that our clients can see. Clients won’t care which brand of word processor we use.
  • WordPerfect has a huge support base, with literally hundreds of licensed, logo-wearing partners producing add-ons and training materials. Microsoft, by contrast, expects clients to generate their own support networks out of the goodness of their hearts, which as everyone knows is not an ample resource.
  • Learning curves cost money. Ease of use is nice, but it’s change, and change has to be taught. It’s cheaper and more practical to build one’s knowledgebase about a product organically than it is to rip it out and transplant some other knowledgebase in its place.
  • Businesses don’t have time to serve as foot soldiers for brand wars. That’s why they pick the standard and stick with it. If companies had the time and resources to fight technology brand wars, we’d be walking around with Apples in our pockets.

Suffice it to say that Microsoft Office now occupies the same castle that fortified WordPerfect two decades ago. Essentially the same arguments that defended businesses’ reliance on WordPerfect in the 1980s, today defend Word, Excel, PowerPoint, and Outlook. However, the landscape of computing has changed, and the new, cost-effective mechanisms for delivering functionality to businesses now makes businesses reconsider whether Microsoft’s position is vulnerable to the same kind of attack that dethroned WordPerfect, albeit from a new front.

Enterprise 2.3 (Beta 4)

While some big businesses invest time, resources, and even money in the adoption and promotion of a packaged business philosophy, in the end their own purchasing and resourcing decisions typically revolve (as they should) around practicality. So while the whole notion of “Enterprise 2.0” took flight in the middle of the last decade, centered around the principle that Web-based technologies would envelop businesses in a rapturous aura of nearly telepathic collaboration, in the end, they purchased SharePoint.

“The technologists of Enterprise 2.0 are trying hard not to impose on users any preconceived notions about how work should proceed or how output should be categorized or structured,” wrote Harvard Professor Andrew McAfee, in the 2006 article that launched the Enterprise 2.0 movement, subtitled The Dawn of Emergent Collaboration. “Instead, they’re building tools that let these aspects of knowledge work emerge.” Rather than a system with a pre-determined template that establishes rules and practices through a standardized taxonomy, Professor McAfee envisioned a blank information space to which information workers would contribute tagged knowledge, creating an emerging, organic form of data association he called a “folksonomy.”

Since so much successful effort had already been expended in the collection of knowledge repositories such as Wikipedia, which fascinated McAfee, he imagined the same incentives being put to work for actual work. With tools no more radical or complicated than ordinary Web browsers, he believed, knowledge workers would contribute to each other’s “blank pages,” and the resulting data would associate itself into some kind of order. He wrote, “Enterprise 2.0 technologies have the potential to let an intranet become what the Internet already is: an online platform with a constantly changing structure built by distributed, autonomous, and largely self-interested peers. On this platform, authoring creates content; links and tags knit it together; and search, extensions, tags and signals make emergent structures and patterns in the content visible, and help people stay on top of it all.”

The first sign of trouble in the E2.0 camp came when McAfee and his colleagues allowed “largely self-interested peers” to define “Enterprise 2.0” itself for Wikipedia, with the result being that different contributors’ self-sustaining goals tended to conflict with one another. As Burton Group analyst Mike Gotta noted in a 2007 report (PDF available here) on the emergence of E2.0 software as a market category, “Wikipedia’s entry reflects confusion that exists in the industry at large (i.e., social software as a category overlaps with definitions related to online communities and collaboration). The result is that virtually any type of communication, collaboration, and information-sharing tool can be arguably part of E2.0. No design or other criteria exist for how social software tools satisfy an E2.0 context and under what circumstances tools (or their use) are considered outside the scope of E2.0. Absence of even a modest set of guidelines has confused the market to such a degree that the term ‘E2.0’ is widely used to describe any new software product or service released over the past two years.”

“Enterprise 2.0 is going to happen in your organization with you or without you,” wrote veteran consultant Dion Hinchcliffe in 2007, at the apex of the E2.0 movement, employing the type of black-and-white, polarizing metaphor that media consultants usually reserve for desperate times. Indeed, times may have been desperate; E2.0 had left open a hole big enough to drive a platform through, and Microsoft did exactly that.

So it was that many of the companies that helped spur the whole Web 2.0 movement began embracing SharePoint as their nerve center for collaboration. For instance, in the summer of 2008 alone, Clearspace wiki technology maker Jive, RSS aggregation service NewsGator, social network integration provider WorkLight, and Confluence co-authoring tools maker Atlassian all enhanced their products with SharePoint connectivity. All of this endorsement of new bottles for old wine took place during the “Enterprise 2.0” conference that year.

Apparently what E2.0’s originators forgot was the fact that only poets appreciate the beauty of blank pages. The rest of the world prefers to pick up where others left off, which is the real reason why there are wikis in the first place: They enable others to take additional credit for something someone else started. Platforms work the same way; they’re structures that you build on top of. Rather than build a new utopia upon a blank page, the E2.0 world opted to build a SharePoint-based sharing system attached to the platform they could already depend upon: Microsoft Office. SharePoint carved out Microsoft’s space in the Enterprise 2.0 realm, and Office occupied it firmly.

After wiki software producer Jive partnered with Microsoft for a SharePoint integration feature, its CEO told CIO Magazine, “Around 80 percent of our customers have SharePoint. You have to recognize it exists.”

And that could very well be among the smartest things anyone has ever said, at least in a long while. Businesses are not ant farms; they don’t congregate in open fields to share information and build taxonomies, or something-onomies, where there were none before. Resourcefulness is always about taking advantage of the existing structure, or infrastructure, as a platform for something greater.

The Deathmatch is Canceled

Microsoft’s entire business model stands as proof that products need not be revolutionary to be successful. But they do need to be evolutionary; they must present some quantifiable reason for businesses to justify the expenditure necessary to effectuate a transition. Maintaining the usability of a business’ applications as it evolves is among the biggest expenses it faces. In light of that fact, the principal case made by competitors (Oracle Open Office, Corel WordPerfect Office, Lotus Symphony, Google Apps Premier Edition, Zoho Business Apps) is that they are undifferentiated from Office in every important regard except cost.

In January 2009, Google began its effort to convert Google Apps into a revenue center, competing directly against Microsoft. Since observers realized that online services was Microsoft’s soft spot, they foresaw Google — whose search application was one of the catalysts for the E2.0 movement — as the best equipped to lead a charge.

“Make no mistake about it. Google is going for Microsoft’s jugular,” wrote InformationWeek’s David Berlind, putting on his best Don LaFontaine voice. “The deathmatch is on and, at the very least, it’s for bragging rights to what we…are calling the ‘collaborative backbone.’ It becomes a battle that’s less about Google Docs versus Microsoft Office and much more about the collaborative infrastructure behind Google Apps versus Microsoft’s SharePoint and Exchange.”

A few days prior to Microsoft’s worldwide release of Office 2010, Google made its case for enterprises suspending their migration plans and going with Google Apps instead — whose premium package is licensed at $50 per user per year. As usual, Google’s case was brief, direct, and sociable, arguing that switching to Google would be an “upgrade” where you wouldn’t have to do very much: “If you choose this path, upgrade means what it’s supposed to mean: effortless, affordable, and delivering a remarkable increase in employee productivity. This is a refreshing alternative to the expensive and laborious upgrades to which IT professionals have become accustomed…Google Docs represents a real alternative for companies: a chance to get the collaboration features you need today and end the endless cycle of ‘upgrades.’”

Google makes an interesting case that’s both clever and familiar: It doesn’t render Office obsolete, but then again, it doesn’t have to. Perhaps only certain people really need Office apps on their systems; and for the rest of your company’s employees, the argument goes, maybe you could install Google Apps, and folks who don’t use Office’s more obscure features anyway won’t miss them. Notice also how (correctly) Google identified its Apps customer using second person (“you”) language, and “IT professionals” in the third person.

Still, like it or not, Google raises a very pertinent issue: Why pay for functionality — or even quality, for that matter — if not everyone needs or appreciates it? If Google can win over some converts from the bottom up, perhaps some companies that typically deploy applications from the top down, some believe, will take note of what their employees are doing anyway and cut costs.

The problem is, contrary to reason, the addition of one simply does not replace the other. While analyst firm IDC predicted in July 2009 that adoption of Google Docs among enterprise-class users could reach 27.1% by summer 2010, it simultaneously predicted, using the same survey data from the same participants, that Microsoft Office adoption would remain flat at 96.9%.

If there’s a deathmatch on, then someone clearly forgot to don his “Nacho Libre” outfit. Indeed, businesses are claiming to embrace what now passes as Enterprise 2.0 technology; but more and more, Microsoft is being associated with it, thanks to SharePoint. “Embrace and extend” has succeeded yet again; and while Google Apps may yet win over more converts in the general user community, Office’s platform is already equipped with a top-down delivery approach.

Microsoft has the wherewithal and the gravitas necessary to stop Google Apps’ advance with Office Web Apps. So for the only relevant market to which Google Apps appeals — everyday users who want convenience and simplicity — Microsoft can add the convenience of working the same way that regular Office apps work, for the same limited class of work that Google Apps covers. Thus if anyone at the top of the ladder in IT management truly does pay attention to the advice of everyday users at the bottom of the rung, to borrow the self-deprecating E2.0 metaphor once more, they’d have nothing persuasive left to say.

What makes Microsoft Office work for businesses is the only reason that matters: It’s worked before.

Having worked at the bottom of the E2.0 food chain an eon ago, I can sympathize with those individuals upon whose minds is just now being imprinted these important messages:

  • Everyone else uses Office. If you’re going to spend money blazing a new trail, it needs to be one that someone else has blazed first, with some modicum of success, and has found a way to package and resell.
  • Office has a huge support base, and Microsoft knows how to keep building it, by offering partners tools and resources they can use, to build tools and resources that others can use. Platforms don’t just blossom in the desert from the goodness of people’s hearts.
  • Learning curves cost money. The most fearsome image you can stick in front of a knowledge worker is a blank slate, a null platform, “square one.” It’s cheaper and more practical to build upon what exists than collaborate over the extent to which something doesn’t exist.
  • Businesses don’t have time for deathmatches. If the company with the worst marketing could be declared the loser, Microsoft would have been tossed from the ring the moment it ditched Multiplan.

The good news is, as long as Microsoft Office remains une réalité de la vie, businesses have the opportunity to embrace and extend this platform themselves. You may as well, because until the formula for Enterprise 3.0 comes along, the desktop belongs to Office.


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