A research note from IBRS, believes that Microsoft's
less than full-hearted support for ODF, while not ideal, could have the
impact of commoditising and thus reducing the cost of office
productivity software. The note predicts that Microsoft's reluctant
acceptance of ODF will shorten the time frame of broad acceptance of
the standard to as little as three years.
If the research note is correct, then Microsoft's days of reaping fabulous
profits from Office, which constitute about half the company's net
earnings, are fast coming to an end. The signs are already there that
this is happening, with growth of Office sales slowing to almost a dead
While Microsoft would scarcely admit it, the company has already tacitly acknowledged that its legacy technologies, such as Office and perhaps even Windows itself, are showing signs of being on the wane. That's why the company is spending up big to find new markets to enter.
Meanwhile, other companies which were one time allies of Microsoft, such as Adobe and Symantec, have sensed a weakness in the one-time unassailable market leader and have gone in for the kill. Adobe has prevented Microsoft from including a save to PDF function in Office 2007 and Symantec has launched a law suit and is trying to delay Vista coming to market.
Whether Microsoft can respond to the challenges it faces and carve out a space in new markets remains to be seen. However, it looks like its one time domination of the office productivity space is coming to an end.