The Barbarians Are At The Gate, But Microsoft Moves To Protect Office Revenues

The barbarians are at the gate, a new horde is on the way, but no one seems to be defending the castle. Instead, the Microsoft Office warriors are rebranding, repackaging and relaunching old products and calling them new.

Not to be confused with the 2005 announcement of Office Live, Microsoft today announced Office Live Workspace and reiterated its position that client software is the future, and that online services serve only to enhance the client experience.

The old Office Live, an online service that offers customers a website, online email, office doc sharing and collaboration and third party services, is now being called Office Live Small Businesses. The new Office Live is a way to share and collaborate on Office documents with others (its Sharepoint, hosted by Microsoft), but users still need the expensive and bulky client based software.

Sign up to test the new service here. New users will be accepted over time as Microsoft ramps up the service. Included will be 250 MB for online document storage. Users can upload and share office documents and can email friends and colleagues to invite them to view those documents. New documents cannot be created online. It isn’t even totally clear if documents can be edited online, or if viewers can only leave comments.

Google and other Office competitors will be breathing a sigh of relief this morning – this is not a decisive move by Microsoft to crush the competition as they did with Netscape more than a decade ago. Microsoft has failed to understand the real power of Google Docs – easy, no hassle document creation, collaboration and access from the browser. And it will take them another two years of fidgeting before they really get scared and react properly. Microsoft is falling into the classic trap of failing to realize the disruptive nature of a new competitive technology, instead focusing on the massive revenues it generates from their aging Office suite. Google Docs is tearing the Office wall down, and Microsoft has failed to respond. What a bummer – it would be a good fight if Microsoft would actually get into the ring.