With ThinkFree Office, the company is one of several aiming to grab a piece of the office software market, once a hotbed of competition but now dominated by Microsoft. Corel and IBM still sell versions of WordPerfect Office and Lotus SmartSuite, respectively, and Sun Microsystems recently began $76 for a new version of StarOffice.
"They've reopened the discussion," James Sullivan, ThinkFree's executive vice president of worldwide sales, said about the recent resurgence of interest in the office software market.
So far, however, few of these Microsoft alternatives have caught on with the public. Anecdotal evidence shows that although people may try alternative products, they often switch back.
Sullivan acknowledged that ThinkFree's Office software has less than two-thirds of the features of its Microsoft counterpart--something that might dissuade customers from switching to its product. But the cost savings are compelling, with Microsoft Office selling for $499.
In addition, ThinkFree Office is largely compatible with Microsoft Office, as it reads and saves using Microsoft file formats--all in a program that occupies just 15MB of disk space.
The software is written in Java, which has its advantages and drawbacks. Java, a programming language created by Sun, lets programs run on different computers--such as Macs or Windows machines--without having to be rewritten for each type of system. However, that flexibility means that Java programs often run slower and tend to have less-attractive interfaces.
ThinkFree's Sullivan said the company's OS X version is faithful to the Apple Computer operating system's Aqua interface. In the Mac market, ThinkFree's software will have to compete not only with Microsoft Office, but also with Apple's AppleWorks software, which comes free on many Macs.
Sullivan said that Apple needs Microsoft Office, but it could also benefit from having a competitive product in the marketplace.
"They're not foolish," Sullivan said of Apple. "They know Microsoft means them no good in the long run."
Indeed, even though Microsoft reiterated its support for the Mac earlier this year, relations between Apple and Microsoft have seemed less cordial in recent months.
In the most recent example of growing tension, Apple's new ad campaign is specifically meant to users of Microsoft's Windows operating system.
Sullivan said that in addition to selling to individuals, ThinkFree is working to convince retailers and distributors to bundle discounted versions of the software with new Macs.
From the Web to the box
Cupertino, Calif.-based ThinkFree got its start four years ago trying to provide free office software over the Internet, with the cost of the software supported through advertising.
"That model didn't pan out for anybody," Sullivan said.
The company tried afor its Java-based software. But, like other consumer software companies, it discovered that customers were more comfortable buying boxed software, so it has been selling boxed Windows versions of the Java software since March.
Sullivan estimates that the company could turn a profit on about $4 million of revenue, which would require that the company sell somewhere in the neighborhood of 200,000 boxed copies. But he says the company wants to be more than just a minor player in the desktop computing market.
That's where a deal with cell phone operating system maker SavaJe Technologies comes in. The pact, also announced Monday, calls for ThinkFree to contribute software that allows Java-based cell phones to open Microsoft attachments.
Although the market for such software is tiny, Sullivan sees cell phones as a way for ThinkFree to break out of Microsoft's shadow.