Microsoft Office online for free

Microsoft opened testing for Office 2010 today for a select group of testers and previewers. Fortune reports that part of the distribution strategy for the new Office will be a free online version. Yeah, read it again, a free version of Office from Microsoft.

Photo: Creative commons from sunfox

Photo: Creative commons from sunfox

It was really just a matter of time before Microsoft did this. There are good alternatives to Microsoft Office already available for free. Open Office, Zoho, and Google Apps to name a few. I’ve been using Open Office for about two years now. It put me through graduate school and has performed every function I needed for word processing, spread sheets, and presentations. To be fair, it’s my belief that these alternatives provide a good basic alternative for office productivity. But the Office suite from Microsoft I believe is a great piece of software. For power users, I haven’t seen an equal.

So why was this inevitable for the Redmond giant? There are several factors:

  • Small businesses and startups are actively using online office productivity software and Open Source software as a means to reduce costs.
  • Software license fees will become harder to justify for mid to large organizations in the future. Many organizations (business and education) have begun to use Google Apps. See this example in Arizona State University.
  • Microsoft needs to make inroads in ‘open’ software and the stereotypes from the tech community. Just read the comments at the bottom of the post from Fortune mentioned above to see that it still exists.
  • With increasing usage of mobile devices and netbooks, consumers will gravitate towards online alternatives. Microsoft needs a competitive offering in this space.

Investors in Microsoft and the community should see this as a good thing. For the investors, it means Microsoft is attempting to strengthen it’s presence in a new and growing space for office productivity software. It’s a sign that signifies that Microsoft isn’t so big as to think it’s better than an online offering or that other alternatives can’t compete with Office. Investors should also see this as a complementary product for the full Office suite. Some customer and power users will still like the full version on their client. But they can use the flexibility of an online version when traveling.

For the tech community at large there are questions to be answered.

  • How will Microsoft support open document formats?
  • Will they require Internet Explorer?
  • What exactly will the EULA say?
  • How will they protect your identity or provide document security?
  • What type of SLA will be offered on the hosted systems?

Competition is good, because it makes everyone better. Let’s see if Microsoft can successfully give a little to start transforming itself into a new type of company.