New From Microsoft: 'Google Office Killer' Killer

The battle for supremacy in the online office productivity and collaboration space won’t be fought in the “cloud” as Google and IBM claim, but on the desktop.

Says who? Says Microsoft, that’s who. And with a 95% share of the productivity software market, according to research firm International Data Corp., who’s to argue?

This morning Microsoft announced Office Live Workspace, a Google Docs-style productivity environment that, unlike Google’s vaunted “Office Killer”, doesn’t include online versions of any of its lucrative Office productivity software. Not Word. Not Excel. Not PowerPoint. Office Live Workspace is not a hosted version of Microsoft Office. It’s an extension of it. If you want to use Office Live Workspace, you need to buy Office first.

The move is part of what the company touts as its “software plus services” strategy, essentially the idea that online services should enhance the desktop client, not replace it. Which, despite assertions to the contrary, seems a wise one considering Microsoft’s business division, of which Office is the linchpin, reported annual revenue of $16.4 billion for the fiscal year ended June 30. Can Google say that about Docs and Spreadsheets?

“Microsoft’s strategy boils down to this,” writes ZDnet’s Larry Dignan. “The client is still where the Office game is played, but Web services can extend the functionality. Translated into business sense that statement would boil down to this: Microsoft has a juggernaut in Office, but some folks may someday want Web applications. Microsoft is giving these people a reason to stay with Office.”