Microsoft Wins Today, but Google Wants Productivity’s Future (Premium)

When it comes to traditional office productivity, Microsoft has no peer. But thanks to Google, it may also have no future.

I know this one is going to be controversial in certain circles.

And that’s because Microsoft’s office productivity solutions—let’s just call it Office 365 to simplify matters—is more full-featured and powerful than any of the competition, including Google’s offerings, which we’ll just call G Suite for the same reason.

It’s also fair to say that the battle between these two products has, thus far, been quite one-sided, at least on paper. According to the latest data, Office 365 is almost exactly 10 times as big as G Suite from a revenues perspective.

In other words, Office 365 is more functional and generates many times the revenues of G Suite. Game over, right?

Not exactly.

Microsoft sees its biggest success today with the largest and most established companies on earth. Google, by comparison, is largely focused on schools and new businesses. There are two ways to view these types of businesses. Microsoft’s focus is where the money is today. Google’s focus is on the future.

I’ve already made the argument why Google’s focus is a problem for Microsoft: With over half of U.S. schools now using Google products and services, an entire generation of students is going to graduate and enter the workforce just as the current generation of IT pros and decision makers are retiring. And they are going to demand access to the tools with which they are familiar, just as new employees do today.

Put another way, though, when was the last time that giant enterprises—Microsoft’s most lucrative installed base—led the way in innovation or in adopting new technology? Right. Never.

Put yet another way, what Microsoft is doing, largely, is transitioning existing customers from on-premises solutions like traditional Office and Exchange to Office 365. What Google is doing is racking up new customers at a faster pace. This is a battle of installed base vs. growth.

When I look at the trends, I see two major warnings signs for Microsoft. One is external and one is internal.

First, Google is undergoing a wartime-like effort to rapidly add new features to G Suite in order to bridge the most important functional gaps with Office 365 and improve compatibility with legacy Microsoft Office document formats and capabilities. The tenacious search giant cites over 250 new features in the past year alone. Including, most recently, the ability to comment on Office documents from G Suite’s native viewer experiences.

Obviously, both sides are going to add features. But while there is nothing Microsoft can do to prevent Google from catching up functionally, it has likewise harmed its own efforts by completely bungling its client productivity strategy. It’s biggest problems are self-inflicted.

Over several years now, Microsoft has displayed what can only be described as a complete lack of direction and leadership by squandering its lead and confusing customers with an expanding range of clients that lacks cohesion and direction. At various times, Microsoft has vacillated between a combination of legacy desktop apps and often weird new mobile experiences, mobile versions of legacy desktop apps, web versions of legacy desktop apps, and “containerized” Store versions of legacy desktop apps, and any and all combinations of the above.

Seriously. What is Office anymore? What is the direction forward? One gets the idea that even Microsoft doesn’t know. That it is, in fact, making up the strategy as they go.

Part of the problem, of course, is the failure of the Microsoft Store, which probably triggered a rethinking of one clear strategy forward. But instead of embracing the right technology, Microsoft has just kept trying different ideas in small pockets. It has added features to certain versions of certain Office apps on certain platforms at certain times. It has created a mess.

Guys. It’s not that hard. But while the world has shifted to mobile and web, Microsoft has been forced to retreat back to the desktop. It’s most recent release, literally, is a version of the Office 2016 suite that is distributed through the mobile app-based Microsoft Store in Windows 10. Its next releases will be more versions of those apps plus a new legacy suite of apps, Office 2019.

Stop. Please.

Is there hope for Microsoft? Of course. Microsoft Teams shows that the software giant can, in fact, create major new platform-level Office solutions and not just throwaway mobile apps. That Teams is based on web technologies is excellent, and correct. And the firm has pledged to transition Teams into a full-featured Progressive Web App (PWA) that will work across all platforms, not just Windows. That is the future, both for Office and for the entire world.

Does Microsoft have the intestinal fortitude and strategic sense to rattle its Office cage that hard? It had better. Because the alternative is a slow and painful death at the hands of Google. And it is a death I am now monitoring in real time.