Options drive Web-based Office alternatives

Google's test release Tuesday of an online spreadsheet application is the highest-profile challenge yet to Microsoft's dominant Office software franchise. But it's hardly the first.

While higher-profile Web players such as Yahoo, Ask.com and even Microsoft sit on the sidelines, a wave of mostly US West-Coast-based startup companies are feverishly putting out Webified counterparts to Microsoft Word, Excel and others.

For word processing, upstarts include AjaxWrite from Ajax13; gOffice from SilverOffice, Zoho Writer from AdventNet; iNetWord from iNetOffice; and Google's own offering, which arose from its acquisition of Writely in March.

For spreadsheets, Office alternatives include WikiCalc, created by spreadsheet pioneer and VisiCalc creator Dan Bricklin; EditGrid from a Hong Kong-based company Teams and Concepts; iRows from irows.com; AjaxXLS from Ajax13; and Dabble DB, from Smallthought Systems.

There are even online equivalents to PowerPoint, such as Thumbstacks.com, and an alternative to Microsoft's project management software: Project-On-Demand from Projity.

Not only are the applications mostly free, but they let users easily collaborate and edit documents simultaneously, a key feature that historically has eluded Microsoft.

For instance, Google Spreadsheets, can read and write files in Excel format and handle many basic calculations, though it can't understand advanced Excel commands such as macros. But the software can let up to 10 users simultaneously edit a spreadsheet, while chatting via an adjacent instant-messaging window.

That trumps the back-and-forth e-mail exchange of documents -- with changed areas highlighted in red -- that most Office users are forced to do today.

"I believe Web-based applications from a variety of providers, like Google's new Spreadsheets, will represent a significant challenge to Microsoft Office 2007," said Jeff Kaplan, an analyst at ThinkStrategies. "Rather than invest in a new software suite, many users may choose to take advantage of software-as-a-service alternatives."

Microsoft is making collaboration features a prominent part of its upcoming Office 2007, due out by year's end. Many of those features, however, will require companies to deploy and support additional back-end software, such as SharePoint 2007.

Microsoft has said it will make some collaboration features available via its Office Live, though it has stopped short of replicating any of the features in its Office software for fear of cannibalizing sales.

"I think they'll want to offer something to MSN and Office Live users, but they'll want to make sure they leverage their strengths -- and tie whatever they offer into their desktop products," said Melissa Webster, an analyst at IDC.

"Microsoft is not going to lose its Office software franchise anytime soon," said Dustin Rector, an analyst at Tier 1 Research. But "if Microsoft chooses to sit this one out, they will begin to lose out long-term."

Marc O'Brien, founder and president of Projity, said Microsoft already is losing ground. In the three months since his firm released its Project-On-Demand application, it has gained 100 user companies, a combination of paying and trial customers. "Today's project teams are much more likely to be geographically dispersed. That's a good thing for us," he said.

Project-On-Demand is part of Salesforce.com's AppExchange network; as a result, it is tightly integrated with Salesforce.com's CRM application and its hosted user data and is available to Salesforce.com's 450,000 users.

O'Brien said customers include smaller firms as well as some Fortune 500 companies. But Webster believes that early adopters will tend to be consumers and small companies.

Using Google for enterprise documents such as proposals, contracts and budgets "is a stretch -- at least in the next several years," said Webster, because Google hasn't created a software-as-a-service business yet, and therefore doesn't have any protections in place for enterprise data and doesn't have guarantees of service levels and the like.

Some startups, such as iNetOffice, are hoping to sell word processing applications to larger software-as-a-service vendors for bundling within their own applications, according to iNetOffice President Tom Snyder.

But with a market that analysts say is ripe for consolidation, most startups are taking the usual route of frantically building up their technology and wooing end users to make themselves attractive to potential buyers.

In addition to buying up companies, Webster believes larger Web players will also build connectors between search engines and Web applications for an enriched experience. "For example, I can see Google Spreadsheets being very useful in the context of a search like 'find me the best rates for my ZIP code and my loan amount for a 30-year fixed mortgage,' then being able to do some 'What ifs?' using a prepopulated spreadsheet," she said.

Doing that also creates another medium for Google to deliver contextual advertising, Webster said.

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