Microsoft misses the boat on web applications

Editor’s note: Chuck Dietrich is the chief executive of online presentation company SlideRocket, and previously served as general manager and vice president of mobile at Salesforce.com. He contributed this column to VentureBeat.

There is a lot of chatter over the impending arrival of Microsoft’s Office 2010. Delayed as it may be, it has prompted an enormous amount of discussion over the potential value of Office-type applications moving online. Some say it is a game changer and bound to happen, and some claim that most users are too entrenched in current computing behaviors to make significant and habitual change. No matter where you fall in the debate, there seems to be a baseline level of agreement that, at the very least, online access to your documents is a good thing.

The big question remains: Are you better off moving your entire business and document life online? Large companies like Google bet yes, and I not only agree with them, but believe there is much, much more to the online story than what Microsoft (or Google, for that matter) has to offer.

I spent the previous nine years at salesforce.com, and have seen first-hand how software-as-a-service and web-based applications can completely change an industry and displace the entrenched companies whose revenues rely on client based software.

Is Microsoft one of the “old” and in for a similar fate? Based on the current trajectory of innovation from new technologies, many signs point to yes.

Case in point

Let’s look at Microsoft’s Office 2010 due out later this year. Judging from the technical preview, Office 2010 will include Web-based versions of its popular desktop suite, including PowerPoint. Since a web-based PowerPoint is of particular importance to me, allow me to indulge in a bit of a deep-dive on this one.

This is the biggest thing to happen to PowerPoint in a long time. After all, the technology is more than 25-years-old — it is an application that allows for the creation of presentations. But, if you try to go beyond authoring and embrace the entire lifecycle of a presentation from creation to management, collaboration, delivery and measurement, PowerPoint fails.

Will Microsoft’s plans for the semi-web version of PowerPoint change this dramatically? It does not appear so. Essentially, what the feature does is create an FTP server in the cloud where users can upload and download PPT files. Granted, this is a step forward in what PowerPoint presentations can do, but there are so many more possibilities when you allow a presentation to become truly online content — a living, breathing document that allows a presenter and viewer to interact with and learn from each other.

Think about all the online tools that sales and marketing teams take for granted and can’t live without, such as collaboration, asset management, analytics and more. Match that up against the reality that presentations are second only to email in their importance to sales — they are the conversation opener and hopefully the deal closer, and 30 million of them are delivered each and every day — and it is easy to see Microsoft shortcomings.

Online documents and presentations need to be living, dynamic web content. This is the game changer. By simply posting files to the cloud like 2010 plans to do, Microsoft is again missing the boat by not embracing online architecture in its entirety.

So why is Microsoft only taking a small step toward a cloud-based presentation application? The crux of Microsoft’s problem is old habits. It is a problem of addiction to an out-of-date technology foundation. Beyond this, and perhaps most importantly, it’s a problem of Microsoft’s business model — the company continues to find it difficult to let go of up-front software sales and revenue and truly commit to the cloud based revenue stream. Customers expect web apps to be straightforward, but Office 2010 is not as simple as “log-in and get to work.” At the very least, it seems business users will need SharePoint for content management, likely Groove for collaboration, and even more Microsoft applications will be required for more advanced work flows.

It’s a long way from SaaS to $aa$

Microsoft’s revenue question is a big one — going from licenses to software-as-a-service has it’s complications and growing pains, especially for a well-established, license-based, public company. It isn’t just a short-term hit either. This has massive long-term ramifications that will require Microsoft to either make a giant leap all at once and feel a lot of pain, or take baby steps that make room for innovative and faster moving companies to overtake them.

SaaS is an all or nothing deal. You architect from the ground up for SaaS or you try unnatural acts to get client server software to look and feel like SaaS … and it fails.

This is definitely a fascinating space to be in at this moment in time, and I for one look forward to helping people find a new path to business success.

[top image:flickr/meddygarnet]