Microsoft aims to sell business on Office 2010 (Q&A)

As Microsoft prepares for the corporate launch of the new Office, the head of its business division talks about moving beyond the desktop.

Ina Fried Former Staff writer, CNET News
During her years at CNET News, Ina Fried changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley.
Ina Fried
8 min read

After months of pitching businesses on Office 2010, Microsoft Business Division President Stephen Elop is excited to start selling the product.

Although it won't hit store shelves for another month, large businesses can now start buying the latest versions of Office and SharePoint, an event which will be marked later on Wednesday with an event in New York. With this version of the product, Office is going in several new places, with the most important of those being to the Web browser.

Elop Microsoft

Along with the traditional desktop applications, the new Office features Web-based versions of Excel, Word, PowerPoint, and OneNote. Businesses can offer them to workers via the new SharePoint, while consumers will soon be able to get them for free via Windows Live.

That evolution, says Elop, is part of what makes the new Office a compelling upgrade, regardless of what the competition says.

"We are focused on delivering the best productivity experience across the PC, the phone, and the browser," Elop told CNET in an interview this week. That means the new Web apps, yes, but also powerful desktop features such as photo and video editing as well as new versions of Office for mobile devices--though notably not for the iPhone.

Here is an edited transcript of our conversation:

Q: The toughest competition for Microsoft with any version of Office is getting businesses and individuals to upgrade from the older version they're already using. In a nutshell, what's Microsoft's pitch to large businesses this time around?
Stephen Elop: That's a great question. We are focused on delivering the best productivity experience across the PC, the phone, and the browser. Also, for the individual, we're very much focused on making sure that people can work better together, taking advantage of the social-networking capabilities, the rich cloud technologies that we've implemented, and a variety of other things. And then, third, we're making sure that people can absolutely bring their ideas to life, get their jobs done more cost effectively, more productively.

At the same time, you know, for the IT professional there's all sorts of opportunities here in terms of taking advantage of the cloud capabilities, and a number of the things that we've introduced into SharePoint, and into Exchange Server.

Can you quickly name a handful of specific features that the average productivity worker wants that they'll get with Office 2010 that they couldn't get in either Google Docs or a prior version of Office?
Elop: Sure. For users of our Outlook product for e-mail and various forms of communication, there's all sorts of capabilities that have been introduced to help people more effectively manage their communications, whether it's ignoring threads of communication that are annoying, whether it is the ability to work with advanced conversation views to deal with complex communication patterns, or the interoperability we've established between Outlook and a number of the social-networking environments, like LinkedIn, MySpace, and Facebook through the Outlook Social Connector.

As it relates to the productivity applications like Word, PowerPoint, and Excel, we're very much introducing capabilities that allow people to, for example, edit video right in the context of a PowerPoint presentation and rapidly move that through into production; or, for example, within the Microsoft Word product to co-author a document, and have more than one person working on the same document at the same time in a full production environment.

Google's argument, or one of them, is that businesses should just stick with the version of Office they've already paid for, and move to Google Apps for things like collaboration, and browser-based editing. What's the main argument against that strategy?
Elop: I think the main argument in favor of Office 2010 is that the way people work is a rich combination of the PC, phone, and browser. For different scenarios, they need to work with different ways. It may be the case that a sales person has to do some simple editing of a PowerPoint presentation that may well be done effectively in a browser. At other times, people are creating richer forms of communication, in that case they may be working with a PC client application. So, it's really about the recognition of all of these different environments contributing to a complete productivity experience.

One of the things that Microsoft has said is that they view, you guys view the browser-based apps as good for viewing, for lightweight editing. Others in the industry argue that the whole productivity experience is moving to the browser. Why do you feel it's important for deeper editing to handle things in a desktop mode?
Elop: I think the highest order thing to recognize is that the basic strategy of software plus services--of software on a rich client device combined with services--is today delivering, and we believe will for some time deliver the best experiences that people can expect. In our world, that means that there's client versions of the applications, there's browser-based versions that work beautifully together, taking advantage of the unique properties of each of those different environments. We think that's the right strategy.

We think that competitors are also recognizing the same requirement, and thus you see other companies introducing new operating systems, and new ways of taking advantage of the client device in the same way that we have for many years. So, we think that the software plus services strategy is being well-validated as our competitors either take advantage of or introduce multiple new operating systems to accomplish the same thing.

The browser-based Office Web Apps come a number of different ways. Businesses that want to run them inside their own shop can use SharePoint 2010, another option for businesses will be to get the Office Web Apps in a hosted form from Microsoft. When will that be available, because right now the online version of SharePoint is based on the older SharePoint that doesn't have the browser-based Web Apps?
Elop: Right. We'll be seeing first customers taking advantage of the browser-based Web applications against SharePoint Online later this year.

And what about for consumers? Consumers will have free access to the browser-based Office Web Apps as part of Windows Live. When will that be taking place?
Elop: We haven't announced the specific date, but people are already using that in beta form. And you should see that roll out in concert with the Windows Live Wave 4 series of releases, which are in the months immediately ahead.

I was talking to Zoho last week, and they put forward the notion that not only are productivity tools moving online in a lot of ways, but things like word processing and spreadsheets are quickly becoming features that are integrated with other online applications, and that the real power comes as you sort of mix and match these older productivity tools, or more traditional productivity tools with newer things like CRM and so forth. I'm curious, is this kind of mixing and matching a view that you guys share?
Elop: Well, I think we have demonstrated that we do believe that the whole is greater than the sum of the parts. Applications working well together is really something that's important. You've also seen us do some work in this area where, for example, elements of the Office Web Apps are being incubated in the context of a Facebook environment. It's still at an early experimental phase, but something that we think is very interesting in terms of recognizing that productivity is something that can interoperate well with many other scenarios.

And that's Docs.com. Are there folks at Microsoft already using this in interesting ways? Is this something that Microsoft is committed to long-term or is it more of an experiment?
Elop: This is an incubation for Microsoft. We're learning ourselves at Microsoft, and from people who are participating in the public domain, as to what this means, and how this could expand, what the opportunities are. But, I'll say that we're very excited about the future possibilities here, both in the context of Facebook, and elsewhere.

You mentioned, the idea of this wave of Office products being about the desktop, the Web, and the phone. The one we've heard the least about is the phone. What are some of those experiences that Microsoft is going to be delivering this round on the phone?
Elop: What we've done with the Office Mobile applications with this series of releases is to make sure that we're focused on scenarios that are uniquely advantaged in the phone environment. For example, you've seen demonstrated the PowerPoint broadcast capability, where in the context of a phone, as well as on a PC or a browser, you can participate in a PowerPoint presentation that's live and being broadcast. That's something for a mobile worker that can be very powerful.

Obviously, one of the mobile environments that's very popular these days is the iPhone. So far Microsoft really hasn't done anything specific to the iPhone, although some of the browser-based capabilities, I suppose, would work there. Is that a platform that you're hearing from customers they want some support for?
Elop: There's no specific plans for that at this point.

Is it something that comes up from customers in terms of a request?
Elop: There are no specific plans at this point.

Have you noticed the change in the willingness of businesses to spend on technology as the economy has started to pick up?
Elop: Well, we've certainly seen in the consumer segment some pickup. We're still hopeful that we'll see that same pickup in the future in the business environment. That being said, one of the things that we're celebrating a great deal, and we'll talk about at the business launch, is the very high degree to which individuals in business and in the consumer world have been beta-testing and spreading the word about the advantages of Office 2010. We'll be publishing numbers about the phenomenal pickup around the beta usage, which when combined with the early success we're seeing with Windows 7 gives us great hope for what to expect in the future.

Is a big part of Microsoft's strategy going to be pitching businesses to upgrade to Windows 7 and Office 2010 together, or are you really trying to have those as separate conversations?
Elop: Generally, we encourage customers to think about their whole computing environment, their whole desktop environment holistically. It's well recognized that going through these refresh cycles, to the extent that you can take care of a number of the upgrades simultaneously, it's generally something you can therefore accomplish more cost-effectively.