How Vulnerable Is Microsoft?

For the first time in, well, forever, I'm wondering whether Microsoft's (Nasdaq: MSFT  ) Office franchise is in trouble. Google's (Nasdaq: GOOG  ) Apps Marketplace could be giving the search king a competitive advantage in productivity software.

The Apps Marketplace is reminiscent of the iPhone App Store; it's where Google Apps users purchase and download add-ons. Last week, 16 more became available, including Gantter for project management, and Jive Express for collaboration via social networking.

Microsoft has had Office add-ins for years. But add-ins are mostly tricks and shortcuts. Google Apps add-ons are software. Google is borrowing from Apple, encouraging developers to create gimmickry for Apps in the same way they do for the iPhone and iPad.

Consider Jive Express. Users can tag content they create in Google Apps, then create discussions around those tags. Neat? Sure, but whether or not Jive or any other current Google Apps add-on is must-have software isn't the point.

As an investor, it's the pattern that matters. What's happening in this market reminds me of the battle between Siebel and salesforce.com (NYSE: CRM  ) . Siebel once dominated the market for customer relationship management software -- but no more. Research shows SAP (NYSE: SAP  ) as the leading CRM vendor, with Oracle's (Nasdaq: ORCL  ) Siebel second and salesforce.com third. Up from nothing a decade ago, salesforce.com's collaborative platform today accounts for more than $1 billion in annual revenue.

Could Google's productivity-apps superstore produce similar gains for the search king? I like its chances, but I'm also just one Fool. Please share your opinion by voting in the poll below. You can also leave a comment to explain your thinking.

Apple is a Motley Fool Stock Advisor selection. Microsoft is a Motley Fool Inside Value pick. Google and salesforce.com are Motley Fool Rule Breakers recommendations. Motley Fool Options has recommended a diagonal call on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and stock positions in Google and Oracle at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool owns shares of Oracle, and is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is all apped up.


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