MS Office and Productivity

The New York Times writes about Microsoft’s focus on making MS-Office the central plank in an effort to raise people’s productivity and increase its revenues:

“Office defines business productivity,” Bill Gates, Microsoft’s chairman, told financial analysts in July. He added that “the productivity area is probably the most important franchise that we have.”

With that focus, Microsoft is now pursuing a strategy to transform Office from a bundle of programs on personal computers into a family of software that can put Microsoft’s technology deeper into the operations of corporate data centers.

The information worker business at Microsoft, which is nearly all from Office, had revenues of $10.8 billion in the year ended in June, and operating profit of more than $7.15 billion. As a stand-alone business, Office – which on average sells for about $275 – would be slightly larger than the second-largest software company, Oracle, and far more profitable.

Traditional Office programs helped enhance productivity by allowing workers to easily create and modify digital documents. The aim of the new initiative is to increase the productivity with new tools for collaboration, communications, planning and document handling.

New programs – like SharePoint, LiveMeeting, OneNote and InfoPath – have been introduced in the last year or so as part of the “Office system,” a term Microsoft adopted last fall to replace “Office suite.”

The new design makes programs like Word, Excel and Outlook e-mail part of collaborative work spaces. In theory, a worker working in Word could tap into all the corporate information on a customer or project.

“Making collaboration faster, easier and more efficient will be the next revolution in worker productivity, and we want to be in the forefront,” said Peter Rinearson, vice president for new business development in Microsoft’s information worker group. “The goal is to make Office a tool that steadily delivers productivity improvements. It becomes a competitive advantage for the companies that use it well. If you don’t have it, you can’t keep up.”

Increasing information worker productivity is the next Holy Grail of desktop computing in the developed markets where everyone already has one or more computers. I think this is still an open area – Microsoft does start with a significant advantage, but it is by now means a winner.

This is also an area ripe for disruptive innovations . These will start with groups and go bottom-up. This is where social software and meta-mail comes in.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.