They're Coming to Get You, Mr. Softy

If Microsoft (Nasdaq: MSFT  ) thinks it's facing a tough crowd out in Brussels, just wait until it sees who's crashing its Office party back home.

IBM (NYSE: IBM  ) is the latest gladiator to step into the coliseum with hopes of slaying Mr. Softy's market dominance in application software. In a bold move, IBM was offering up its IBM Lotus Symphony apps suite for free through its website as of this morning. 

Symphony consists of three programs, each a doppelganger of a core Office offering. It offers word processing, spreadsheets, and presentation software -- which aim at Word, Excel, and PowerPoint, respectively. It can import Microsoft documents, too, so the transition is a snap. IBM is giving away the product to companies, universities, governmental agencies, and consumers like you and me.

Giants gang up on the bigger giant
This isn't the first time IBM has taken a swing at Microsoft's software stronghold. It tried -- and ultimately failed -- in supplanting Windows as the operating system of choice with its OS/2 in the 1990s.

Microsoft has greased that ladder pretty well over the years. It's been hard even for free open-source invaders to unseat Windows at the top of the PC operating-system heap.

Saving Office will be trickier, because there are now too many companies hitting the market with free or deeply marked-down, enterprise-grade, Web-based solutions. Google (Nasdaq: GOOG  ) has been in the game since assembling the pieces for its Google Apps offering last year.

This week, it finally launched Google Presentations. The Web-based PowerPoint clone is a cinch to use. The slides are easy to make. Once you begin a slideshow presentation, a URL pops up, and you can share it with anyone in cyberspace who wants to follow along with your presentation. Sure, Microsoft's PowerPoint is loaded with great features, but Google's equivalent happens to be free.  

This also comes after Yahoo!'s (Nasdaq: YHOO  ) $350 million purchase of Zimbra last night. That move is being portrayed as a way for Yahoo! to beef up its e-mail presence, but Zimbra's real calling card is a suite of Web-stored applications for the online sharing of spreadsheets, documents, and group calendars.

Forget about lions, tigers, and bears, Dorothy. It's IBM, Google, and Yahoo! Oh, my!

The hunted and the hunter
Google teamed up with Sun Microsystems (Nasdaq: JAVA  ) nearly two years ago to promote StarOffice. It seemed like a flimsy move at the time, but in retrospect, it looks like a smart opening move in this chess game that Microsoft finds itself playing, in a very crowded room.

The timing is not coincidental. The market is impressed to learn that Microsoft has moved 71 million licenses of Office 2007 in its recently concluded fiscal 2007. That may sound like a lot, but it's a small fraction of the 400 million to 600 million global users of Office.

In other words, the vast majority of Office users are in no hurry to upgrade. Either older versions satisfy their needs, or the desire isn't there to pay for the new stuff. No matter what's at the heart of the reluctance, this is an opportunity for everyone else.

If consumers and companies don't see it that way, maybe consultants will make them see the fiscal light. Capgemini, a global leader in consulting and IT outsourcing, is backing the commercial version of Google Apps over Office to its clients.  

That's where we are in this battle. Any win for a non-Microsoft solution is also a stab at Microsoft. No one will argue that Office is going away, but this is no longer about Microsoft trying to battle an IBM or Apple (Nasdaq: AAPL  ) on its operating-system home field, or blowing out Netscape as the visiting team on the browser front.

If office applications are moving to a Web-stored platform, Microsoft may very well find itself as the underdog as it suits up against the search-engine giants. How can this not eat into Microsoft's pricing flexibility? How can it not make Microsoft vulnerable, for a change?

They're coming to get you, Mr. Softy. Be ready.