Or at least that's how the story goes. Microsoft's line of popular Office products is on its way down, clutching at a past history of successes and resting on its former laurels, while consumers move to cheaper offerings from Google, Apple (Nasdaq: AAPL ) , and Zoho. However, if you think Microsoft is about to fail, I have a little secret to tell you.
The secret (don't pass it on)
You're wrong. Yes, you're very, very wrong. Today's story line will center on researcher NPD's reports that Office 2010 sales are "disappointing." But those with fears based on early Office 2010 sales are missing a key opportunity.
Truth be told, it's no big surprise that early sales of Office 2010 aren't a smashing success. For the most part, Office is a mature line; it's hard to improve on past features. By all rights, the line should be drawing decreasing sales as Apple and Google catch up with its capabilities.
However, as I sat at Microsoft's massive Worldwide Partners conference this week, I couldn't help but feel that business unit was following a shrewd strategy. On stage, Business Division President Stephen Elop laid out a vision for a suite of interacting Microsoft programs. It was a big plan, it was a bold plan, and it just might make sense.
Microsoft's secret sauce?
The plan? Build out a host of business applications that connect together, and make them all accessible through the cloud. Customers are looking for simple, interoperable solutions. Microsoft has been moving toward the idea for a while, but it's now aiming to deliver these cross-functionalities across programs with laser-like focus.
The company has slung together a group of programs that competes with Oracle (Nasdaq: ORCL ) in accounting and human resources management, Cisco (Nasdaq: CSCO ) in communications, Google in email with Microsoft's new online Exchange Server, and salesforce.com (NYSE: CRM ) in customer relationship software. All these applications, along with the Office Suite, interact together. It's one big, bold vision of Microsoft providing a complete solution for enterprise applications.
Microsoft will tell you the "breadth of programs provides opportunity." Tie collaboration and messaging tools into Outlook. Then have Outlook interact with Sharepoint, and have any of these programs interact with Microsoft's Dynamics suite of HR and customer-relationship software.
Microsoft's business unit is being pitched as future roadkill by some, but I think the cross-sale opportunity on the applications surrounding Office is misunderstood. Given better tie-ins and having partners sell their product line as a fully packaged solution, the company has some great opportunities to expand its revenue away from the Office suite. Really, it's just following the path of its large IT peers. Microsoft is trying to become a one-stop shop for clients' needs.
Do you still think Microsoft's Office suite is doomed and the surrounding applications will wither away as well? Or do you think the company has a bright future? Sound off in the comments area below.