Today is a special day for Microsoft
A lot is riding on these software updates, particularly Office 2010. This division was a real killjoy during Microsoft's latest quarter. Windows 7 saved the day, as Windows-related revenue accounted for $967 million of the $855 million in consolidated improvement on the top line. In other words, Microsoft's 6% uptick in revenue would have turned negative without Windows.
The company is no slouch in server software, and its Xbox division is coming around, especially now that Netflix
Refreshing its productivity suite every few years is usually a good way for Microsoft to shake up new sales and drum up no-brainer upgrades. The new version offers more collaboration tools and easier graphics implementation. Those features alone might not be enough to move the masses to the new platform, but at least Mr. Softy's trying. However, it may be trying in vain to outrace an oncoming trend tornado.
We're just beginning to enter an age of cloud computing. Rudimentary word processing and spreadsheets no longer require software packages with three-figure price tags. Plenty of free web-based solutions will do the job just as well, spearheaded by Google
Microsoft isn't clueless. It's addressing the cloud threat by offering web-based versions of Office 2010's programs. Mr. Softy already has 40 million paying customers for its Microsoft Online Services. However, it further plans to roll out scaled-back free consumer versions of its Office to compete with Google.
That strategy will fare poorly for Microsoft. It obviously can't make the freebie edition good enough to eat into premium sales. However, if it skimps on too many features in the free version, it will simply push casual users toward its cloud-based rivals.
In short, on this very special day, Microsoft has more to prove than ever.
Will web-based productivity suites ever surpass old-fashioned installable software? Share your thoughts in the comment box below.
Microsoft is a Motley Fool Inside Value choice. Google is a Motley Fool Rule Breakers recommendation. Apple and Netflix are Motley Fool Stock Advisor picks. The Fool owns shares of and has written puts on Oracle. The Fool owns shares of Microsoft. Try any of our newsletter services free for 30 days.
Longtime Fool contributor Rick Munarriz didn't upgrade to the last Office update, so he's not sure whether he will take two steps up this time. He owns Netflix shares, but holds no position in any other company mentioned. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.