Is Microsoft's Business Plan Obsolete?

What Judge Thomas Penfield Jackson eventually decides regarding Microsoft's fate in the U.S. government's antitrust action against the software colossus may not be the biggest problem on Bill Gates and Steve Ballmer's plates.

Looming is potentially punishing competition from free software - not just the Linux operating system, which is gradually eating into the Windows OS hegemony on enterprise PC platforms, but also new freeware threats to Microsoft Office, which now enjoys about an 80 percent share of the productivity application market, and reportedly accounts for some 40 percent of Microsoft's profits.

Is Microsoft, as some suggest, stuck in an obsolete business plan ill-suited to an increasingly wired world? Was Windows 2000, five years in gestation, "yesterday's OS" before it was released?

Specifically, Microsoft charges a lot for its Windows and Office Software. Once Linux becomes user friendly for ordinary users, something CorelLinux has pretty much accomplished, with others to soon follow, will Microsoft be able to continue convincing IT managers to equip large businesses with licensed Windows 2000 Pro software at a list price of $289 a pop, when Linux is available for free or a nominal convenience fee. There are also other inexpensive Unix-based options, like Sun's Solaris and Hewlett-Packard Co.'s HP-UX, or Apple's nascent MacOS X, which should undercut Win2000 Pro substantially in price. Perhaps someday people actually will "get fired for choosing Microsoft software."

Besides CorelLinux and several other easier-to-use Linux variants, a development group called Eazel, led by several veterans of the original Apple Macintosh team (Michael Boich, Andy Hertzfeld, and Bud Tribble) was founded last August with the objective of developing desktop software and a user friendly interface for Linux that they claim will "revolutionize desktop computing." "Our goal isn't to recreate what we did 15 years ago [with the Mac]," says of Eazel president and CEO Michael Boich, "It's to combine a next generation desktop with Internet-based services to deliver a superior user experience."

The free, Open Source-based Linux operating system has enjoyed the fastest adoption rate of any operating system in history, and Eazel intends to ride that wave by developing products that make Linux as easy-to-use as Windows or the Mac OS.

As well, Corel Corp., and Inprise Borland, recently announced their intention to merge, potentially creating a Linux powerhouse that could credibly challenge some of Windows' hegemony. Corel is also reportedly developing a Web delivery system for its productivity products, as is IBM with its Lotus SmartSuite office suite.

Then there's Microsoft's ubiquitous Office productivity suite, which sells for an individual price of about $480 per copy or $200 per upgrade from earlier versions, while Corel's WordPerfect Office 2000 for Linux, a fully functional office suite, will soon be bundled with the CorelLinux OS beginning in Q2 '00.

StarOffice

However, you don't have to wait - or be running Linux, to get a full-featured free office productivity software suite now. Sun Microsystems' Star Division offers StarOffice a powerful, multiplatform suite of office applications for free over the Internet.

Like MS Office, Star Office comes with a word processor, a spreadsheet program, a presentation program, a draw module, a data base program, a calendar, an email program, and a Web browser. It is arguable that none of these applications are as good as the corresponding ones in MS Office, but they are more than functional enough for the typical Office user, and cost nothing.

The StarOffice suite consists of:

• StarOffice Writer: word processing
• StarOffice Calc: spreadsheet
• StarOffice Impress: presentation software
• StarOffice Draw and StarOffice Image: graphics software
• StarOffice Schedule: calendaring
• StarOffice Mail: email
• StarOffice Base: database interface
• StarOffice Discussion: newsreader
• StarOffice Math: formula software
• StarOffice Workplace: desktop environment

The word processor module, Star Writer, can open, edit, and save Microsoft Word files, handle Word's paragraph styles, numbered paragraphs, bulleted lists, and many other formats. You can also create tables, set bookmarks, and create footnotes. With, as Sun puts it, "Microsoft office Interoperability - seamless and transparent migration and exchange of word processing, spreadsheet, and presentation files."

Star Office's email client program isn't as good as Microsoft's Outlook Express, and its bundled Web browser is pedestrian compared with Microsoft's Internet Explorer, however those components of Office (as well as Netscape Communicator and Eudora 4.3) are available from Microsoft for free anyway, and they can be used in conjunction with StarOffice.

StarOffice 5.1 is available in versions supporting Windows, OS/2, Linux, Solaris, Java, and soon the Mac OS, with the engineering effort to port StarOffice to the Mac reportedly now well underway.

StarOffice can be downloaded from the StarOffice website or a CD-ROM may also be ordered via the web at <http://www.sun.com/products/staroffice/get.html>.

Sun's nominal rationale for providing StarOffice for free is that if more software people want to use is available online, more people will use the Internet, which in turn will encourage more service providers to upgrade their systems, which would be good for Sun's Internet server sales.

However, it has been suggested that the real motivation behind Sun's launch into the office software orbit is continued animosity between Sun and Microsoft. Sun has historically sold no desktop application programs, so giving away StarOffice won't harm its bottom line, but any significant switching trend from MS Office to StarOffice will be bad news for Microsoft.

ThinkFree Office

Another free MS Office alternative is ThinkFree.com's ThinkFree Office, a Web-based productivity suite which the company claims is fully compatible with Microsoft Office. Developed from the ground-up in Sun's Java programming language, ThinkFree Office is optimized for the Web and will be available Windows, UNIX, Linux and Macintosh versions, although it currently supports only Microsoft Windows 95, 98 and NT, and Red Hat Linux 6.0.

The ThinkFree Office family of applications includes:

• Write, a Microsoft Word compatible word processor/HTML editor
• Calc, a Microsoft Excel compatible spreadsheet
• Show, a Microsoft PowerPoint compatible presentation graphics program
• Mail, an IMAP4 and POP3 email client with an integrated file attachment viewer
• Contacts, an address book with built in LDAP support
• Folders, a file manager for navigating and managing documents in local folders or in secure ThinkSafe cyberfolders.

ThinkFree Office uses a MS Office-like interface and offers complete file format and user interface compatibility. ThinkFree claims its Office gives consumers all the advantages of Microsoft Office both online and offline.

"ThinkFree Office is about freedom," says Ken Rhie, president of ThinkFree.com. "It frees the user from any operating system, device or location. It even frees the user from having to have a constant Internet connection. And, of course, the product itself is free."

Small businesses and organizations will appreciate ThinkFree Office's low total cost of ownership, since updates from the Web are automatic, eliminating the need for maintenance or upgrades. In addition, since it operates like the familiar Microsoft Office, training needs are minimized.

In a telephone interview, Ken Rhie told me that he has contracted a consulting firm that specializes in Java for the Mac to help accelerate development of the Macintosh version of the suite. Mr. Rhie did not wish to speculate on a target date for the Mac version's release at this point, but said that it's possible that it could be available within a "couple of months." "We will love to have a Mac version of ThinkFree Office," said Mr. Rhie.

While the standard version of ThinkFree Office is free, there will also be a "Business Edition" available for fee. ThinkFree.com is backed by Massachusetts-based Prism Venture Partners as well as investments from Tredegar Investments, LG and Samsung. ThinkFree Office is available free to consumers on the company's portal site, http://www.thinkfree.com. For more information, contact: info@thinkfree.com.