Sunday, September 24, 2006

Microsoft Office Online?

Some sources report that Microsoft may migrate its office products off of the personal computer to the Internet (see article here). This would likely be a strategic response to Google which continues to encroach on the Microsoft-dominated productivity market through the use of web-based applications.

While this microcosm is in itself interesting, this may be the sign of a larger market trend. Consumer applications are increasingly moving out of laptops and PCs and into the internet in order to capture ad revenue, take advantage of increased community interaction and provide consumers with increased flexibility. Wouldn't it be nice to be able to change computers and continue editing your PowerPoint presentation?

The implications of this trend are far reaching. Software developers will need to respond to this virtual migration or be left behind. These companies should also be prepared to swap in their subscription business models in exchange for advertisement revenue models. However, the implications of this go even beyond the software market; hardware manufacturers should also be aware of this trend. As services increasingly go online, one has to ask, "will the PC become just a terminal? Will people continue to buy expensive multi-gigabyte hard drives or will they save personal files online? Will prices for these stripped down terminals squeeze margins even further? Will commonly held files (e.g., music) be stored on thousands of hard drives, or will one server house one file to which access will be sold to millions?" As bandwidth becomes more accessible and more robust, the way that we compute is evolving - and with change comes oppotunity.

No comments: