Microsoft's Office streaming price too high to compete with Google Apps, some partners say
Pricing through ASPs may be four times or more what Google charges for its applications
Computerworld - As Microsoft Corp. moves toward allowing application service providers to stream Office to their customers, the software vendor still seems to fear hurting itself more than being hurt by Google Inc.
At its Hosting Summit 2008 earlier this month in Bellevue, Wash., Microsoft officials quietly told application service providers (ASP) that they would soon be able to sell subscriptions to Office and then deliver the desktop applications to users via the Internet.
End users would access Office through application streaming, an up-and-coming technology that lets companies store applications on servers and then use the Internet or their own local networks to send the code to PCs. Corporate customers that have purchased maintenance and update contracts under Microsoft's Software Assurance program can already stream Office to internal employees. But this is the first time that Microsoft is extending the capability to ASPs, which have long campaigned for the right to do streaming.
Nevertheless, some hosting providers are unhappy about the price that Microsoft has set for streaming Office, saying it's too high to win over customers that are considering or already using less-expensive online office suites, such as Google Apps.
In addition to a free, unsupported version of Google Apps, Google offers its software in an enterprise version that includes technical support and costs $50 per end user annually. Google is still trying to build up its suite's credibility with corporate users. But early indications from ASPs are that streaming Office 2007 will cost four to six times what Google charges for its applications.
For instance, one Microsoft reseller is charging ASPs $10.20 per month for a streaming client license of Office Standard 2007, according to a price sheet seen by Computerworld. A license for Office Professional Plus 2007 costs $13.23 per user on a monthly basis through the reseller.
"I don't believe that this will attract a large number of customers currently using Google Apps," said Gagan Prakash, senior executive director of engineering at GroupSpark Inc., a Burlington, Mass.-based company that delivers hosted versions of Microsoft products through other service providers. Why does Prakash think that? Because, he said, hosting providers will need to mark up the price between 50% and 150% in order to make a profit, thereby resulting in a monthly retail price of $15 to $25 per user for Office Standard.
"In order to compete with Google, Microsoft should have a lower-end offering that is very, very competitive on pricing," Prakash said. "This [price] isn't nearly aggressive enough."
Others say the cost of the streaming option may also be too high to tempt companies that currently run on-premises versions of Office.
- The Business Value of Continuous Delivery Download this whitepaper to learn more about the business value of Continuous Delivery and see why it could be a game changer for...
- Ten Factors Shaping the Future of Application Delivery Download this research report conducted by Enterprise Management Associates (EMA) to learn how those that are seeking to accelerate application delivery are leveraging...
- HTTP Status Code Cheat Sheet Look at the Graph, Find the Code and Boom - You're Solving Problems. Identifying and understanding common HTTP status codes can go a...
- Architects lead the next generation of data-driven applications Read this whitepaper to find out how application architects can quickly and confidently deliver long-lasting applications that minimize cost, complexity, and risk while...
- Keep Servers Up and Running and Attackers in the Dark An SSL/TLS handshake requires at least 10 times more processing power on a server than on the client. SSL renegotiation attacks can readily...
- On Demand: Mastering the Art of Mobile Content Management Mobile device usage in the enterprise has skyrocketed, and it continues to escalate. IT must answer to users who demand access to their... All Desktop Apps White Papers | Webcasts