I haven't posted anything about Google's new spreadsheet product yet. Mostly because I haven't had time to look at it in depth and because we all knew it was coming since at least Oct 2005 (even though Jason Calacanis seems to think calling it was a big deal) so it's no big surprise.
But I was reading Jeremy Wright's post about it this morning and I have to put in my 2 cents.
JW tries to make the argument that MS Office isn't too expensive. I think the key question to ask isn't "is MS Office too expensive" but "who wants to pay money for software"?
But let's look at Jeremy's argument in detail because I think there are several flaws in his logic.
1. MS Office is cheaper.
Jeremy starts by suggesting that Google will charge 5$/month for the whole Office suite and that Microsoft Office is cheaper because people only upgrade every five years, so $5 x 12 x 5 = $300, the price (in North American dollars perhaps) on MS Office. In Australia we pay about $500 for Office Professional Edition.
Has Google tried to charge for anything yet? In the 8 years they have been around, have they tried to charge you for anything they have produced? And yet their revenue is on track to be $10 Billion this year. I don't think they are going to change the model. The model is ad supported. So we should be comparing $300 to free. And then we have the question about why people only get new Office functionality every five years! FIVE YEARS!!! Damn, five years ago my PC was a 50 pound weakling compared to where it is today. Why shouldn't my Office suite be keeping pace with it? If I was using a free online office suite, perhaps it would get upgraded more often and I would be more productive. So I say score TWO points for the Google model on this question.
2. Office is more feature-packed.
It's true that MS Office has more features than Google's versions of them today and that's going to matter to some people. But do you really think Google aren't going to open up the API for their Office suite and let people build new functionality on top of them? I do. And anyway I don't buy the Microsoft line (that I read on Scoble's blog as well) that:
while some may argue that “most users only use 10% of Office”, the reality is that every user uses a different 10%
Let's take a quick poll - which features do YOU use most in Excel? For me it's the ability to calculate tables (basic operators like add, subtract, multiply, divide) and maybe graph it. I have NEVER used any of the fancy functions in Excel. I'm just not smart enough. And I would hazard a guess that most "home" users and most small businesses would use the same basic functions as well. This probably isn't a battle over the large corporate space today. It's a battle for the home and SME space. And the SME space is one of Microsoft's largest opportunities. Will a small business pay for something if they can get it for free? I run a small business and I say... umm no. Money not spent on software is money I can spend on... paying the mortgage. Salaries.
I went to dinner last night with an old Microsoft colleague, Duncan Strong, who now works at Webcentral, and he had an interesting insight that these are the same arguments that people made FOR mainframes and AGAINST the PC 20 years ago. And yet the light, cheap, flexible model for the PC worked. You need to ask yourself WHY. I think the same logic applies to the light, cheap, flexible model for software.
3. Microsoft provides better online support.
Yeah? Try cancelling your Hotmail Plus account. As for Google's support, the great thing about where we are at with the web at the moment is that most support queries are a Google search away. I can answer most of my support questions with a few clicks. And most of Microsoft's online support isn't provided by Microsoft. It is provided by MVPs. They don't work for MS. They are volunteers who have a passion for the product and get a little bit of lovin' from Microsoft every now and again. Most do it for the same reason many of us blog and podcast - recognition. Very easy for Google to set up a similar model.
4. Google isn’t a software company.
Sorry, WHAT? Jeremy totally lost me here. If they aren't a software company, what are they?
The other BIG factor that an online office suite has in its favour is one that I'm experiencing right now - rebuilding my PC. I hate the whole "backup my PST/OST, install Office, re-boot, download the 400 service packs / urgent security upgrades, re-boot, where did I backup my OST/PST (and what the hell is the difference between the two again?)" rollercoaster. It shouldn't take a day out of my life to re-build my PC. I can see the day rapidly approaching when I install an OS, a browser, and then get back to work. The thing I love most about Gmail is that my data is safe. I can't screw it up. I can't accidentally format a hard drive and lose it. Now... Microsoft is talking about storing all of your documents in the cloud, and that's great, but why stop there? Why not run your application in the cloud? Scoble is right of course - there are times when you aren't online and you need access to your applications, but seriously, those times are shrinking faster than the RIAA's credibility. Scoble talks about needing to open a spreadsheet on a plane and not being able to get to the web. Dude, I have a word of advice for you - DON'T. Read a book. Watch a vidcast on your iPod. It's okay. There isn't enough frakkin room in economy to open a laptop anyway. And if you're flying business class, then you probably CAN afford Microsoft Office.
And here is my final point.
We've recently seen Google announce the deal with Dell where they will be PAYING Dell to ship the Google toolbar on their PCs. For the entire history of the PC business, the economic relationship has been the other way around - the hardware guys paid the software guys to ship their software. Google has turned the model on its head.
What if... Google offered to pay BUSINESSES a share of the adsense revenue if they used Google Office? What if you got paid to use software instead of having to pay to use it?