Everyone seems to agree that Microsoft's main reason behind its attempted purchase of Yahoo! is to raise its profile in the online search and advertising world. Obviously, this is something they want, but Reuters' Eric Auchard thinks there might be more to it than advertising.
From reuters.com
SAN FRANCISCO (Reuters) - Savvy office workers frustrated that their on-the-job computer tools don't function as smoothly as, say, an Apple iPod are taking matters into their own hands.
No longer are they relying on company technicians, or information technology (IT) administrators, to choose the software needed to get the job done. They know how to pluck tools right off the Web.
...
Because Web-based services often are free or charge little, budget restrictions, typically used by corporate managers to rein in organizational projects, rarely apply.
...
This is risky for the software maker. The ease with which modern Web sites let individuals add or subtract features creates headaches for Microsoft, a company that grew rich selling software to organizations and technical decision makers. The next version of Microsoft Office software only goes into testing in 2009.
"Established software companies like Microsoft have less ability to promise a product in the future and have customers wait for it," Wettemann says. "When something I can find on the Web does 70 percent of what I want, today, why should I wait?"
This makes a lot of sense. It also makes me wonder how MS would monetize applications or add-ons that are available online. Would they move into an enterprise subscription service? Something where a company would pay a fee, based on number of users, and then each user would have access to an entire menu of apps to download as they see fit? Would they try and subsidize the web-available applications with advertising? The latter option seems like it would detract from their core business.
A lot of MS products fall somewhere between good and great. The issue, as addressed in the article, is that the cost and availability of web-based alternatives that do "70 percent of what I want, today" make them much more appealing to the user. If Micsrosoft can, on its own or through buying Yahoo!, find a way to merge their quality with the convenience that consumers are looking for...they'll be unstoppable.
But in a good way.
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