Microsoft’s Cloud Strategy: Crippleware

Microsoft is releasing details today on its web-based versions of Office.

Is should not come as a surprise that compared to the desktop product, the cloud product (Microsoft Online Services) will be a subset of desktop. This is not a freebie for corporate users – pricing is $15 / user / month. Current products include Microsoft Exchange Online, Microsoft SharePoint Online, Microsoft Office Live Meeting, Microsoft Office Communications Online will be augmented with the web apps including Word, Excel, PowerPoint and the OneNote as complements to the desktop versions.

If you use  Windows Live, current plans are to offer the cloud apps as part of it as a freebie, although ads will pay for the service. MS is betting that these emasculated versions will not unduly cannibalize the stand-alone desktop product, as the web versions will not give users the full MS Office experience.

I think this strategy only offers an umbrella under which somebody like Google will offer more robust web apps, undercutting MS’s efforts. What you’ll probably see is an escalating feature war between MS and Google to draw users into their web apps with enhanced capabilities. Basing a strategy around crippleware just does not seem to make a lot of sense.

Consumer outrage over Windows 7 for netbooks (remember the 3 app limit?) led MS to change its limitations pretty quickly. I would not be surprised to see features in the web version increase over time as consumers raised objections to what they can do and make their concerns known. Google of course will raise the bar as it offers more functionality to distinguish itself from MS.

Underlying all of this are the products from Open Office, which offers quite robust desk top office apps as a freebie. While there is a learning curve to some degree, it remains that for consumers doing the usual home based tasks, Open Office is a great alternative which can read and save docs to MS formats. Breaking MS’s monopoly grip at the office may be in the offing; certainly at the home user level, it’s entirely possible to get along quite nicely without a MS product, and Google plans to make it just that much easier.

Seems to me that the scarcity of office apps is trending to zero, with pricing implications not all that favorable for pay-products. For consumers, paying for office apps is akin to giving an outfit such as MS a gift – maybe it’s tax deductible? Otherwise why bother?