Office 2010 Will Continue To Succeed With Consumers

Many product strategists are, like me, old enough to remember software stores like Egghead. Those days are gone. Today, consumer packaged software represents a very limited market – the software aisle has shrunk, like the half-empty one at the Best Buy in Cambridge, MA (pictured).


Only a few packaged software categories still exist: Games. Utilities and security software. And Microsoft Office – which constitutes a category unto itself. Some 67% of US online consumers regularly use Office at home, according to Forrester’s Consumer Technographics PC And Gaming Online Survey, Q4 2009 (US). Office is the most ubiquitous – and therefore successful – consumer client program aside from Windows OS.

Office 2010, Microsoft’s latest release, will continue to succeed with consumers. On the shoulders of Office 2010 rests nothing less than the defense of packaged software in general. It’s also the most tangible example of Microsoft’s Software Plus Services approach to the cloud – a term that Microsoft seems to be de-emphasizing lately, but which captures the essence of the Office 2010 business goal:

To sell packaged client software and offer Web-based services to augment the experience.

Office 2010 includes a number of improvements in usability, new features like Sparklines and Social Connector, and its perhaps most noteworthy new feature, Office Web Apps. Office Web Apps are designed explicitly to help consumers leverage the power of “the cloud” (a term consumers don’t use) while also not cannibalizing sales of the client program. Invariably, some reviews will compare Google Docs and Office Web Apps head to head as if they were meant to be comparable offerings. This is a mistake. Office Web Apps are a complement to the client program, more of a feature than a standalone competitor to Google Docs.

In some ways, the Office versus Google Docs debate doesn’t merit a lot of consideration – it’s still no competition. In terms of usage and penetration, Google Docs remains a failure – so far, anyway. Only 4% of US online consumers say they regularly use Google Docs, according to Forrester’s Consumer Technographics PC And Gaming Online Survey Q4 2009 (US). Let’s think about that for a second: We’re talking about a free software-as-a-service offering from one of the top brand names in technology. The offering has been available for over three years from Google (and two more years if you count Writely before Google purchased Upstartle). And yet only 4% of consumers are onboard. Why is this the case?

  • The browser-based experience remains limited. Whatever advances have happened in programming, the fact remains that browser-based programs offer a more limited experience than client software, as of today.
  • Consumers have a deep, longstanding relationship with Office. Consumers have years’ worth of digital assets designed in, and still most suited to, Office.
  • Local computing power is plentiful and cheap. Unlike enterprises, consumers aren’t thinking “how can I move to ‘the cloud’?” Instead, they will leverage what’s most convenient. All that computing power in their existing PCs still sits ready to use.

What does this all mean? That many consumers would rather purchase or pirate Office than use free Google Docs.

Office 2010 will continue this success in the consumer market. It’s one of a dwindling breed of heavy client programs (outside of gaming), but it’s got numerous advantages:

  • Consumers use it at work. Their employer in many cases trains them on Office. And with Office at home, they can bring work home when they want.
  • Office 2010 was developed with vast customer inputs in mind. The Office team didn’t sit on its laurels, but took the product design task seriously.
  • It’s now complemented by Office Web. Office Web isn’t a panacea for all sharing and collaborating needs, but it will help consumers easily manage files across multiple PCs and to share with their friends.
  • It will ship on many consumer PCs. Finally, the product will be ‘ready to unlock’ on lots of new consumer PCs sold in coming years. With the purchase of a product key card, it becomes convenient for consumers to buy, even if they didn’t pick up a copy when they purchased their newest PC.

What do you think? Will Office 2010 continue the success of Office software in the consumer market?


Offline & Smartphones

I agree JP this is the philosophy we have followed at, you cannot ignore the huge existing user base. The offline ability is also important as is mobility, it is this latter space that the true Office war will be fought. There is an opportunity to develop stripped down versions of Office for Smartphones/tablets/pads, a number of players in this space already. The key is marrying the old with the new, Google have done this to some extent by their acquisition of DocVerse, in the meantime almost deny its existence.

Thank you for your comment.

Thank you for your comment. I agree heartily that the device landscape, which is disaggregating into a wide variety of connected devices, matters a great deal here. Smartphones and other mobile devices are a critical link here in coming years. Google has a particular advantage here, on paper: Android. But until more consumers actually use Google Docs, the wide adoption of Android won't really benefit Google vis-a-vis Office. At the same time, Office needs to find its way to a variety of connected devices. Office Web Apps are merely step 1 on that journey.
best, j. p.

open office

What about OpenOffice. particularly for the consumer and educational markets I'd think it would be a major threat to uptake of 2010

Thank you, as well, for your

Thank you, as well, for your comment! OpenOffice has also remained niche in the US. Our North American Technographics data also has usage in the single digits among online consumers. So far, it's not been in a position to dethrone Office, free or not. best, j. p.

What about OpenOffice

OpenOffice is a great option but you have ignored it in your analisis

Not zero sum game

I agree with JP's analysis of Google docs. In the meantime, I tend to think they are not zero sum game. Also, for offline I believe it's a good thing that consumers would have a choice of either storing data (some private) locally or in the "cloud". Storage location is not and should not be mutually exclusive.

And for another, we need to look beyond Office Suites...


I disagree

1 USA is not the large market on The world
2 There are 2 macrotrends
a) cloud computing for the smarth phones in WiFi and 3 G
b) Tera play a trillions movil devices interconecting

sure Microsoft will sell package software but in Latin America and 3ed world contries people does not have money to buy software as in USA

Many people use now Open Office instead Microsoft Office. The main problem software cost

Office Business

This was quite an useful piece of article for someone like me. I love to write blogs, but never thought of such steps involved in writing a successful comment for a blog.

mark lopez

I have always used and

I have always used and enjoyed Tableau software. This act of cowardice and capitulation in the face of government censorship makes it impossible for me to use your services with a clear conscience. I'm very disappointed by your decision.
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