In a meeting Microsoft held for Wall Street analysts, Steve Ballmer noticed that a lot of them had Apple laptops. “Don’t bother to hide them. I’ve already counted them. And it’s okay—feel free [to use the Macs], so long as you’re running Office.”
Office doesn’t get much attention from commentators but it is one of Microsoft’s most important products. A few weeks ago, Business Week published an interesting article called “Microsoft Defends its Empire” where they discuss this importance and outline some changes that are being made for Office 2010.
The core problem with Office is that it has completely dominated its market for more than 10 years. Back when MS was launching Internet Explorer 7, I was at a conference where the lead developer was speaking. When he was asked where MS had been for the past 5 years the jist of his reply was, “it’s hard to innovate when you have 95% market share”. That’s why Internet Explorer was innovation free until Firefox started round two of the browser wars.
When you dominate:
- It’s hard to justify a big budget
- Innovation slows down because the development team doesn’t have “the fear”
- The innovator’s dilemma means that existing fat-margin markets get all the attention at the expense of emerging technologies
So now, in a classic case of innovator’s dilemma, Google docs might slowly be getting “good enough” to undermine MS’s dominance in the word processor and spreadsheet market.
With each new episode of the browser wars, the blogosphere becomes very excited. And for a good reason: Each iteration means the technology moves forwards.
I’m not sure bloggers will become as excited about innovation in the word processor market, but innovation – and competition – certainly is due.
Here come the barbarians.
