Thursday's Wall Street Journal has a column by Bob Guth that discusses the long friendship between Steve Ballmer and Bill Gates and analyzes the dynamics surrounding transfer of CEO power from Gates to Ballmer back in 2000. Among the many issues between the two, one key casualty was NetDocs, which Guth describes as " a promising effort to offer software programs such as word processing over the Internet. The issue: Because NetDocs risked cannibalizing sales of Microsoft's cash-cow Office programs, some executives wanted NetDocs killed."
Gates and Ballmer were never able to settle on a plan, with the NetDocs initiative ballooning to a 400-person staff and then, finally, getting folded into the Office group in early 2001, where it died.
One has to wonder where the SaaS world, and Microsoft, might be if they had followed through on the development of NetDocs. It would have put itself in a strong position to compete with Google Apps.
Instead it was Google that developed and released an online application suite that includes word processing, spread sheets, presentations, and email. Google Apps can be accessed online for free and is the key element in the challenge to Microsoft's business model of selling software.
Google delivered another salvo to Microsoft's software dominance by partnering with Salesforce.com, which makes applications used by sales representatives available online by subscription. As a discrete offering, Google Apps are a threat to Microsoft's consumer business, but bundled with Salesforce's offerings, they become a real threat to Microsoft's corporate business.
The folks in Redmond must be praying that Google doesn’t buy Salesforce.com in the near future.
Comments