A blog about rhetoric, technology, research, and where we're headed next.
technorati tags:collaborative, office, suites
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Clay,I've read your posts on GoogleDocs and collaboration as well as the fall 06 whitepaper that we discussed in Becky R's TTU class.Your idea that GoogleDocs is built for small business might be spot on. I think two obstacles stand in the way:1. Standardization2. Google's subsidization modelWord isn't king because it's good, it's king because (almost) everyone has it. This makes it convenient to exchange and collaborate. Ask anyone that uses OpenOffice exclusively how hard it is to exchange docs with MS Office users.Second, let's not forget that nothing Google produces is "free". They subsidize all software or ASP apps with their advertising dollars. Long term, they will either need to develop a revenue model for apps or continue to rely on advertising support. Shareholders will never allow them to spend billions on efforts that generate no income.The small business market is poised to be the engine for software growth. Large enterprise companies like Oracle and SAP are showing signs of stagnation because they've saturated their market and now rely only on renewals. Google just might have the intellectual and financial capital to crack this market.
Thanks for the comment, Joel. I wouldn't be thunderstruck if Google started charging for this service at some point -- but I'd be surprised. They have a lot of reasons to keep it free to the public and a lot of ways to monetize it beyond charging for it.* Google knows that its services are like a toll road. People may be willing to spend a few pennies for the convenience, and thirty-five cents here and there is not a burden. Anything more and people will start to take alternate routes. In this case, there are plenty of alternate routes in the form of other collaboration suites and the upcoming Office Live. Open source is also an issue. Just look at Basecamp, which is a great piece of software -- but the open source workalike activeCollab is an entirely suitable substitute if you have your own server. Google's advantages here are that it can subsidize GDocs with other income streams and leverage its massively scaled servers to provide the service very, very cheaply.* One of those monetary streams is Google Apps for Your Domain, which currently includes GMail, GCal, and Google Page Creator. Google is charging for this service, which provides a version of its free software, branded to your organization, with a tech support package. Essentially, you can outsource your IT to Google for a low, steady price. At least one educational institution has signed on, and Pixar and Disney are rumored to be considering that service. Roll in GDocs and GSpreadsheets and suddenly you have revenue streams that will pay for the apps.* And even if Google Apps doesn't take off, Google is enjoying something like annual 24% increases in search. They have a lot of padding to allow them to subsidize GDocs for a while. Strategically that makes sense because ...* Keeping GDocs free means taking at least some revenue away from Microsoft, but more importantly, it offers collaboration features that MS doesn't, which weakens MS' grip on office software. That will change when Office Live comes online, but MS will (almost certainly) charge for Office Live, and if GDocs is both free and interoperable, many will choose to stick with GDocs. It's the toll road vs. the freeway.* GDocs is also making strides in interoperability. I haven't systematically tested it, but in my months of using GDocs, I've been able to open more and more Office docs. Compare that to older versions of Office, which cannot open the new .docx format. Suppose I'm a small business owner whose correspondence primarily includes one-page order forms. Do I buy a dozen new, top of the line computers that are capable of running Vista plus the new Office system just so I can read Word docs that get sent to me? Or do I stick with my current hardware and sign up for a free service with a trusted name? * Granted, GDocs will probably not support footnotes, page numbers, and so forth in the near to medium term if ever. I interpret this as a strategic choice. Office Live will almost certainly support all of these features, and the result will be a lot of processor cycles and complexity devoted to them. Meanwhile, GDocs users will do as I do: collaborate in GDocs up to the next-to-final draft, then export to a desktop app in order to render the final draft for printing. I'm currently exporting into Word, but could easily use InDesign or another page layout tool. This is a hassle, but GDocs' collaboration tools are much more important to me than layout, and the collaborative composing process represents a far larger percentage of my time spent composing documents. Plus many documents don't need that specialized formatting in the first place -- letters of recommendation, for instance.Anyway, it'll be very interesting to see how this plays out. My prediction is generally free GDocs + a GDocs rollout in the Google Apps suite.
*I totally agree that Google will probably seek to keep GDocs free. At some point they might embrace the idea of providing support/customization for a fee for enterprise (an expansion of what they've just announced).*The problem with free apps is that it leaves search to underwrite the cost of development, improvement, and scale for all of Google's apps. The whole world that is "Google" rests on its ability to return relevant search results. For example,* I saw a slightly wacky argument yesterday in the investment community that Google might suffer a short term decrease in revenue as many sub-prime lenders implode and no longer chase re-fi and mortgage seekers with $20 a pop keywords. *Early apps (like Gmail) were an attempt to increase the page real estate and structure that could be used to deliver ads. Since people do not want to see adds in their business collaborative software Google is now in new territory.* MS will certainly unload a bloated OfficeLive that trys to do too much and uses too much overhead (which as you note, is precious in online collab). This presents a great opportunity for Google.*As Google seeks to grow the fantastic services it has developed it will need to diversify it's revenue. Searches are up but I believe that Google is not immune to the advertising cycle that all other advertisers face. Time will tell.
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My second book, Network, was published by Cambridge University Press in 2008.