Microsoft Office 2010 — where’s the part where they get paid?

July 10, 2009 | Paul Boutin | Comments | |

office2010_outlook_previewMicrosoft Office 2010, which gets its official debut at Microsoft’s international partner conference in New Orleans on Monday, will be based around a free, ad-supported Web version of Office. And it’s not a jokey one, from what our embargoed friends in the press have told us.

Conceptually, this is brilliant. Microsoft, faced with competition from free or cheap browser-based apps like Google Docs and Zoho, cuts them off by building its own competitor.

But MS Office is a $15 – $20 billion a year business. That’s nearly equal to what Google sells in ads. The rest of the online ad market is another $10 – $20 billion a year. How much of that is Microsoft really going to capture? Three years ago, it could have glibly promised to grow the market. It might even have done so.

Today, though, it’s hard to imagine Microsoft making more rather than less money by moving its customers online. Office 2010 seems like the world’s revenge on the nerds at Microsoft: This is how it feels to have your livelihood vaporized.

[Screenshot from Paul Thurrott's SuperSite for Windows]

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About the Author, Paul Boutin

Paul (paul@venturebeat.com) covers Apple & the iPhone, social networks & social media, digital music & video, and any crazy Internet story. Paul wrote and edited for Valleywag from 2006-2008, after several years with Wired magazine and Slate. He writes regularly for The New York Times' technology section and sometimes for Wired and The Wall Street Journal. He studied computer science at MIT in the early 1980s, and worked as a software developer and network administrator for 15 years before becoming a professional writer. Follow him on Twitter at @paulboutin, and follow VentureBeat on Twitter at @venturebeat.

  • It's a good idea, as Office has always been grossly overpriced really.
  • Bob
    Yeah, I'm sure MS forgot to think about that part. Fail.
  • RonnieS
    Buy some MS sell options now :-)
  • Paul, you might be forgetting that one of the fastest growing enterprise segments at microsoft has been their servers division... The office suite is no longer products, but documents ans ppts etc are fast becoming the currency of a much bigger ecosystem around them

    I think its an essential strategic move... It's important to have more people making your currency, which will in time sell more copies of sharepoint server and Biztalk server etc $20k a pop that none of the web companies are a serious threat to... But those servers can't feed if the currency (docs) are strtuing to fracture around the web over different online apps

    So the goal for the next 4-5 years may not be to sell the office suite (there are plenty of site-licenses to he sold to companies that prefer security and reliability over online) but to ensure that docx files remain in use by the masses, and to accelerate server sales growth
  • Kendell
    Office 2010 sounds interesting, but why wait for it to come out when you can use a product like eXpresso which already exists. I use eXpresso for business and personal needs and I LOVE IT! eXpresso provides real-time collaboration and editing control for shared Microsoft Office files in the cloud. Check it out at www.expressocorp.com