Cloud Productivity Platform Wars

"I've purchased the latest Microsoft Office for every computer I've owned. It was a foregone conclusion. Dating back to when Word was white type on a blue screen, I used it so often I could recite the shortcuts. (Thesaurus? Shift-F7.) But Microsoft has run out of reasons to keep me paying. How we get work done on computers has fundamentally changed. For the new Office 2016, Microsoft wants you to pay $150 for collaborative capabilities that others already do better, free. It brings little new to people who rely on deep features in Word, Excel, PowerPoint or Outlook. Its mediocrity led me to a larger conclusion: It's time for Microsoft to press Control-Alt-Delete on the whole concept of Office. My relationship with Office started to sour as smartphones carried my work everywhere while my Office files stayed in the cubicle. I began emailing myself instead of fretting about scattered .doc files. Google ran with the work-anywhere idea early. Its free Web-based word processor and spreadsheet allow people in different locations to edit a document together. With Google Docs and Sheets, there's no more emailing drafts back and forth."

"Uber, the car-sharing service, has become ubiquitous. It's now a multi-billion-dollar global business. It's even become a noun of sorts - uberization - which people use to describe a disruptive change to a staid industry ripe for innovation (though, to be sure, the popularization of the word "disruptive" means that it is often used in ways that the concept's author, Clay Christensen, didn't intend). But I would argue that the real reason Uber is disruptive is because it is reshaping how we can think about organizing people, not cars. Uber has shown how you can actually empower many thousands of people to self-organize to tackle a task (shuffling people to their destination in this case) without the preplanning that is the norm in traditional enterprises. Put another way, Uber's business model extends a very complex supply chain beyond the boundaries of a corporation in a way that creates real results without any planning in advance. That is a remarkable example of how technology will reshape how we organize to get work done at scale in the future. For context, I worked at Delta Air Lines for many years before I joined Red Hat, the open source software provider where I am now CEO. When I was at Delta, we spent enormous resources in terms of time and money on planning. Airline operations are a huge optimization challenge. There are hundreds of planes, thousands of pilots, flight attendants, mechanics, and ground crews that must be properly deployed for the system to work efficiently. We needed to process reams of data using expensive and sophisticated software and computers to predict demand, know the capabilities of each aircraft type, and to understand each work group's constraints. We also had an army of PhD-caliber people whose full-time jobs involved figuring out this puzzle in a way that we could still make money. Uber's value chain has a similar optimization challenge - it needs to deal with variable demand, thousands of drivers,

"John Lilly, a partner at Greylock Partners, invests in companies that zhuzh office productivity tools for today's mobile worker. He sits on the board of Quip (a more collaborative Microsoft Word) and Figma (an Adobe Photoshop for the sharing generation), among others. He also led Greylock's investment in Dropbox, along with its stakes in Tumblr, acquired by Yahoo in 2013, and Instagram, which Facebook bought in 2012. Before joining Greylock in 2011, Lilly was C.E.O. of Mozilla, the organization behind Firefox, the Web browser that quietly grabbed share from Microsoft's then-dominant Internet Explorer in the early 2000s. While Lilly is betting on a new generation of Microsoft antagonists, he explains why he isn't writing off the software giant, how new tools will change the way we work, and why he finds Slack so vexing."

To no one's surprise, Microsoft isn't turning much of a profit from its phone business. According to its latest quarterly report, the company saw a dip of mobile revenue by as much as 46 percent. It sold 2.3 million Lumias over the past three months, which is a 73 percent drop from this time last year. Sadly, this is an ongoing trend; last quarter, it reported a phone sales drop by as much as 54 percent. Still, the company is making money. Revenue was $20.5 billion while net profit was $3.8 billion. Microsoft also saw growth from its Surface segment, which grew by $1.1 billion over the past three months. That's up 61 percent year-over-year. The company credited the surge in Surface sales to the Surface Pro 4 and the Surface Book, but there's no word in its report exactly how many of those tablet computers it sold. Windows OEM revenue dipped by only 2 percent, which outperforms the PC market.

"April 21, 2016: In February of last year, Fortune magazine writers Erin Griffith and Dan Primack declared 2015 "The Age of the Unicorns" noting - "Fortune counts more than 80 startups that have been valued at $1 billion or more by venture capitalists." By January of 2016, that number had ballooned to 229. One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. Twelve to eighteen months later, you hit the road and do it again - super simple. While not obvious on the surface, there has been a fundamental sea-change in the investment community that has made the incremental Unicorn investment a substantially more dangerous and complicated practice. All Unicorn participants - founders, company employees, venture investors and their limited partners (LPs) - are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. The pressures of lofty paper valuations, massive burn rates (and the subsequent need for more cash), and unprecedented low levels of IPOs and M&A, have created a complex and unique circumstance that many Unicorn CEOs and investors are ill-prepared to navigate."

"For the past two years, I've been doing a road show about Office 365 with Mimecast to businesses of all shapes and sizes in America and Britain. At the beginning of the show, when I asked the audience, "Who of you has moved or is looking to move to Office 365?" not one hand went up. Fast-forward to a week ago, and more than half the hands went up when I asked the same question. This shift is happening much faster than I would have predicted. [ Considering the move to Office 365? Take these crucial steps before, during, and after for a successful migration. | The InfoWorld review: Office 365 fails at collaboration | Stay up on key Microsoft technologies with the Enterprise Windows blog and Windows newsletter. ] There is no doubt that the driving force behind this shift is Office 365's Exchange Online component. I hear that rationale from everyone I talk to. And it's not only the people I talk to: A recent Gartner survey showed Exchange was overwhelmingly cited as the reason to move to Office 365. Oddly enough, OneDrive for Business was the second motivator, but it was also one of the biggest disappointments thus far. Why? Because, as my colleague Galen Gruman has shown, OneDrive for Business works only partially. Some organizations are motivated by Office 365's preconfigured SharePoint Online to assist with document collaboration and workflow, though the on-premises SharePoint remains much more capable. Skype for Business is making headway for instant messaging and conferencing as well, though it continues to be iffy in multiplatform environments. Then there are the productivity apps -- Word, Excel, and PowerPoint -- which Microsoft has made work well not only in Windows but also in iOS, in Android, and in OS X. Keep in mind that none of this means Office 365 has triumphed over Microsoft's on-premises services. On-premises Exchange -- IT's biggest reason to adopt Office 365 -- is still the leading email server by far. But over the next year or so, we will see

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"Enterprise adoption of Microsoft's Office 365 suite is very high, according to a recent poll of IT decision makers by market researcher Gartner Inc. About 78 percent of the survey's participants reported their organizations are either currently using or planning to use Office 365 software and services. That figure represents a 13 percentage-point increase from the results of Gartner's last Office 365 study, which was published back in 2014. The results were described in Web presentation Thursday by Larry Cannell, an analyst with Gartner's Technical Professionals Group."

"Office productivity: Has Microsoft blown it? Microsoft has dominated the 'office productivity' tools market for decades and is a de facto way of working in most companies. Having significantly held back innovation in the last 10 years, Office is arguably reaching the end of its useful life as modern digital tools make it look like an old bureaucratic anachronism."

"Startups and corporations alike are distributing free software that would have been worth millions a few years ago to gain visibility and use case credibility, but software is an ever cheaper resource... I added '(paying)' in the Drucker quote above for a reason... Last year I wrote a piece here praising and ruminating on Microsoft's brilliant business strategy in perpetuating document work flows to keep their 'Office' suite cash cow producing vast seat licensing riches. You can't blame Microsoft for perpetuating their paying business model, only yielding to threats by either buying them (Yammer, for example) or making their competing products free to scorch earth competitors out of existence by starving them of revenue (One Note to knock out Evernote). What's good for Microsoft and other high-tech vendors isn't necessarily good for their customers in an era where differentiation and innovation are ever more key in order to 'create a paying customer.' As legacy enterprise software value depreciates and becomes ever more brittle and cumbersome as it ages, a great deal of thought has to go into what unique architecture will differentiate and provide competitive advantage going forward. Innovative marketing penetration of digital channels buys time but isn't core digital innovation."

"Back in Microsoft's early days, Bill Gates and Paul Allen devised the mission statement that became the formula for their company's success: "A computer on every desk and in every home, running Microsoft software." Fast-forward a few decades and the playing field has changed. For starters, the notion that we can get by with just one computer at home and one at the office is downright quaint in 2016. Then there's that word software, which brings up images of shrink-wrapped retail packages and CD jewel boxes. Today, most modern development is aimed at creating apps that are lightweight and easily available for modern mobile platforms. And even traditional software is morphing into services, managed in the cloud and available from just about anywhere with Internet access. Microsoft Azure services are gradually replacing on-premises servers, and Office 365 subscriptions are eating into the market for perpetual Office licenses. Put it all together, and I suggest it's time for Satya Nadella's Microsoft to adopt a new mission statement: "A connected world, filled with intelligent devices running Microsoft services and apps." The company's latest financial results suggest that Microsoft is living up to that mission statement. The Intelligent Cloud segment, which combines traditional server products and cloud services like Microsoft Azure, is top dog in Redmond. In the first half of fiscal 2016, Microsoft's combined commercial cloud businesses grew 70 percent compared to the previous year, and that growth rate shows no signs of stopping. To get to that point, Microsoft had to get rid of the mindset that Windows was its most important product. And, indeed, that's happening already. Aaron Levie, CEO of Box and a Silicon Valley veteran, told me recently that he thinks Microsoft has mastered the art of "openness." The result is a series of moves that would have been unthinkable even five years ago, with a steady stream of apps for iOS and Android, including Office 365 rele

"As a means of measuring for how technology is being adopted in the marketplace, the most common metaphor is usually war. Companies are always involved in battles for consumers, new products are launched at strategic dates in the calendar and there is often an overwhelming sense that victory must be achieved at any cost. In the software sector battlefields are vast, ongoing and filled with casualties. More often than not, the definition of who has won and who has lost is blurred-victory is defined by market share and by how and by whom the technology is being used. In the last decade, there has been a war in the workplace, especially when it comes to the integration of the cloud into daily working and collaboration practices. Both Microsoft and Google want to be the dominant players in the arena, but it appears that neither side can currently claim total victory."

"Microsoft's Office 365 is winning the hearts and minds of the workplace, overtaking Google Apps as the preferred productivity tool by an increasing number of business enterprises, a recent report says. According to the second annual Cloud Adoption Report conducted by cloud access security broker Bitglass-subtitled Episode II: Attack of the Clouds and bizarrely using Star Wars as a recurring theme-Office 365 has trebled its user adoption rate in the space of a year from 7.7% in 2014 to 25.2%. Over 34% of organizations with between 500 and 1,000 employees use the Microsoft tool, as opposed to 21.9% who work with Google Apps For Work, an indicator that the authors of the report say confirms that cloud applications are now a significant player. Following a survey of almost 120,000 global companies-both small and enterprise level-the report said that there had been a rise of 20% from last year in the number of businesses that employed a cloud application as their prime productivity tool. In 2014, 28% of respondents used the cloud with that figure increasing to 48% 12 months later. Granted, the sample size had also risen from 80,000 in the first survey, but the results bear out a perception that cloud-based solutions will become the norm."

"Google Apps and Microsoft's Office 365 compete to be the workplace productivity tools of choice. But they are not mutually exclusive as most companies find room for both. A report by cloud identity and mobility management company Okta said that 40% of its customers used Google Apps and Office 365 on a daily basis. According to Okta's 2016 Businesses @ Work report, different departments within a corporate infrastructure are happy to use different parts of the apps for specific tasks such as email or spreadsheets. Around 30% of "overlappers" use Office 365 for Excel, Word and PowerPoint while Google Apps is used for email and inter-office collaborations. Certain industries prefer one to the other, Okta said. Around 82% of financial companies and 77% of biotech firms use Office 365. Google Apps is used by 50% of Internet-centric companies. Office 365 is the dominant force in IT, nonprofit, construction, healthcare and telecommunications. Google Apps is the preferred tool in marketing/advertising and education. Software companies are almost split down the middle-around 27% use both, while Google Apps is used by 38% of companies compared to the 35% who go for Office 365."

"There's a funny pattern of awakening that tends to happen when a technological advancement sneaks up on us. It starts with a mess of confusion. We don't understand the technology or its purpose: "I don't get Twitter. Why would I want to know what you had for lunch?" It then evolves into miscategorization: "The iPhone is actually a pretty crummy phone." We get so caught up in definitions, we almost miss the larger leap that's occurring: "Why would people use messenger apps when you can just text?" Then, finally, we get it: "The iPhone is not a phone at all. It's an everything device. And Twitter is not about lunch. It's about removing the barriers to real-time publishing." While we're busy missing the big picture, a rapidly growing niche of early adopters is diving in. Early adopters don't get distracted by the need to categorize or define the technology. They just use it. And in repeated agenda-less use, the bigger picture becomes clear. This same pattern is happening today with Snapchat. Hang with me. Don't roll your eyes just yet. I'm going to pay it off. I've been a Snapchat doubter for a while now. Like many others, I relegated it to a fad or a niche service for a subset of a subset of the population. I'm beginning to realize I was wrong."

"The free Airtable database app for iOS has an edge over spreadsheets, and it lets you easily collaborate with other users. It may be overkill for some people, but its flexibility in storing and sorting data could be invaluable to others." It's been nearly three years since Bento, an easy-to-use database app for Mac and iOS, joined the digital junkheap. During that time, I hadn't seen anything that can truly replace Bento - until I tinkered with Airtable. Airtable is a free iOS app that recently received a big upgrade. It has the look and feel of a spreadsheet app, such as Numbers or Excel, but it has a relational database engine as well. (Airtable's Android app is currently in beta, there's a Google Chrome app, and you can use Airtable's website to create and edit your databases.) New features include the abilities to share records via email, search the database template gallery, and create calendar events from date fields.

"There's a new coalition in D.C., and big players like Apple, DuPont, Ford, GE, IBM, Microsoft, and Pfizer have all signed up. Unfortunately, launched on the day the Senate was supposed to take up the latest effort to reform the patent system, the coalition's sole purpose appears to be an effort to derail the important strides we've made toward fixing the patent troll problem via the proposed Innovation Act legislation. So what is it about the Innovation Act (and other legislative proposals being discussed in the Senate) that this coalition thinks will harm both their businesses and ability to build innovative products? These companies were all startups themselves once, and protecting startups that cannot afford to protect themselves from patent trolls is at the heart of the Innovation Act. The startups being targeted by patent trolls have less than $10 million in revenues. They are in no position to hire a patent lawyer to understand the scope of the threat they face - let alone pay the millions of dollars it would cost to take case to court. Even worse, startups are too often short on talent, so they do not have the luxury of using their current employees to read and understand vague patents with "fuzzy boundaries". Today's trolls send out scores of demand letters that make vague assertions of patent infringement while requesting "licensing fees" of $100,000 or more. The cost of trolling, on the other hand, is minimal. Trolls also typically render themselves litigation-proof by creating shell companies with no assets, should they fall into legal trouble from a wrongful suit. We need real reform that will stem the tide of the troll epidemic, while maintaining protection for patent holders to enforce their legal rights. This is precisely what the current proposals would do."