IBM on Tuesday announced the
The computing giant, which has been, said that Lotus Symphony is a standards-based alternative to Microsoft's proprietary Office.
Separately, on Monday afternoon, Yahoo said that it paid $350 million to acquire Zimbra, a start-up that developed a Web-based e-mail and collaboration package comparable with Microsoft Exchange and Outlook.
Meanwhile, Google on Monday
The flurry of investment in productivity software points to technology and business changes in the IT industry that are making Microsoft's cash cow vulnerable to alternatives, particularly among small businesses and consumers.
But don't expect Microsoft coffers to start draining tomorrow. Analysts expect Microsoft to retain the great majority of its Office customers as it adjusts its product development toand , even as competitors try to siphon off its Office revenue.
"I think there's some blood in the water between Microsoft not getting its Open XML (Office document formats) fast-track standards approval and the European Commission ruling," said Michael Silver, an analyst at Gartner, referring to two recent Microsoft setbacks.
Microsoft failed to get its Office Open XML formats
Microsoft has shown some signs of reacting to the full-court press it's seeing from competitors.
Last week, it made a version of its Office suite
A Microsoft spokesman on Tuesday said that Office meets its customers' needs because the company continues to invest in it.
"Competition is good for the industry and good for customers. That said, Microsoft Office continues to be the overwhelming choice for a broad range of organizations and individuals," said Jacob Jaffe, director of Office at Microsoft. "Microsoft Office has changed as people's work has changed, and the alternatives for the most part have aimed to meet the needs of the past."Low-risk volley
IBM on Tuesday offered up beta versions of the Lotus Symphony applications--a document editor, spreadsheet and presentation program--to end users and business customers for free download.
The applications run on Windows and Linux, and a Mac version is planned.
IBM executives said that the company's backing of OpenOffice-based software and the
For support, the company is pointing its customers to online forums on its Web site.
But company observers expect IBM to start to make paid support services available to large customers.
For IBM, which makes about half of its revenue from professional services, pushing into desktop software with Lotus Symphony is a low-risk way to try to upset the balance of power using standards as a lever, said Stephen O'Grady, an analyst at RedMonk.
"If (Lotus Symphony) destabilizes Microsoft's Office business, that's a huge win and the potential risk for IBM is essentially nil because it's not a business where they are competitive anyhow. And it won't cannibalize any of its own products," O'Grady said.
Realistically, Lotus Symphony applications don't have the same advanced features found in Microsoft Office.
IBM said the programs are designed for ease of use and to be easily integrated with other applications. In addition, IBM made pains to point out that the programs support OpenDocument Format, or ODF, a standard document format. They also will work with Microsoft Office documents and Adobe Systems' PDF.
Stripped-down productivity applications could have an appeal in some corporate computing situations, such as small businesses or companies that don't want to pay a full Office license for employees who rarely use the suite, some analysts said.While IBM, Sun Microsystems and Novell are attempting to offer OpenOffice-derived alternatives to Microsoft, Web businesses Google and now Yahoo are using Web 2.0-style features to attack Microsoft's largest businesses.
Yahoo'sis notable because it resembles a full-featured desktop application but the client runs in a browser. To do that, Zimbra has made heavy use of the to make its application more interactive and support features such as "mashups," Web sites or applications that combine content from multiple sources but appear seamless upon use.
Zimbra has signed on 8 million customers through Internet service providers. The company designed its e-mail server for businesses as well, an area where Microsoft's Exchange is entrenched. But it's not clear whether Yahoo will continue to pursue that market, O'Grady said.
Several other start-ups are developing Web-based Office alternatives using Ajax or Adobe's Flash, which are typically free for consumers.
Google, meanwhile, continues to expand its Google Apps suite through new products, such as Google Presentations, and acquisitions including Web collaboration company JotSpot, which it.
The Web search king also has its eye on large businesses. It approached consulting firm, which costs $50 per user per year.
Capgemini executives said the product lacks the sophistication of Microsoft Office but can fill a role even inside large corporations, such as collaborating with business partners over the Internet.
Chris Swenson, a software analyst at NPD Group, said the most recent sales data on Office 2007 looks very good for Microsoft. In the retail channel, sales to date this year show Office having a 96 percent dollar share and 98 percent dollar share in the commercial market.
It's exactly that massive market share and the billions spent that explains IBM's introduction of Lotus Symphony and Web-based Office alternatives, said Gartner's Silver. He added that he has seen more "reasonable interest" in Office alternatives in the past year among Gartner's corporate clients.
Microsoft "makes billions of dollars (in desktop software) so it's a hard market to ignore," he said. "But it's a hard market to get into."