Another Texas VC

Instead of studying for an Economics Midterm I spent a good chunk of this weekend playing with Windows Live, Microsoft’s attempt to combine a set of disparate internet services into a coherent web experience. Although I had individually seen these applications operate independently before, it wasn’t until I read Ray Ozzie’s memo on internet services that I realized that there was some coherence behind this chaos. This isn’t Microsoft’s only attempt to consolidate a hodge-podge of web services. Office Live is another, somewhat redundant, attempt to create a coherent web experience, with an emphasis on services for the (small) enterprise.

This isn’t a particularly new space. Google has been building and acquiring its own stacks of services to provide a fuller experience. (Even Apple has a stake in this game). A few things immediately strike me about the rival plays:

Rich Client Experience versus Collaboration: Based off of their areas of expertise, Google and Microsoft are advocating different paradigms. Microsoft uses the functionality of their ubiquitous software as a launching point, with web services meant to enhance the experience. The Office Live homepage feels like a light content management page (SharePoint Lite if you will) where the focus is on the documents themselves, created and edited based on local applications. The Google site I use with classmates is much more focused on providing a fuller collaboration environment (through light weight subpages, calendars, comments, etc) where the static documents are more of an afterthought. During their joint interview at last year’s All things D Conference, both Bill Gates and Steve Jobs talked about how they fundamentally believed that the richer client experience is a better approach to harnessing the web. I don’t know where I stand in the discussion, but the contrast is striking. Google apps give me the 80% of functionality I need to share something quick with a colleague, but doesn’t compare to the professional grade content I can create with Office or PageMaker. At first view the Google slate seems more appropriate for internal discussion, with the Office Live experience geared towards producing external deliverables. It’s also worth mentioning that these aren’t necessarily mutually exclusive strengths, making the next round of betas all the more exciting.

Hosted Email: Both slates also have hosted email solutions; Gmail and Windows Live Mail. Without getting into a long winded discussion of the merits of the two rival services, it’s worth mentioning that the same paradigm difference is here as well. The Live client (which requires a client-side install) provides a host of options (folders, offline persistence, etc) that Gmail just doesn’t offer. Once again its about providing a client heavy feature rich service powered by the web instead of living permanently on it.

The Victims: In my last blog post I mentioned the $3 billion content management market. Although neither of these solutions provide the depth of functionality (multi-level approvals for example) of a Documentum or FileNet, it’s worth noting that this rivalry has made check-in check-out functionality coupled with version control free. The market for a simple ECM solution solution no longer really exists.

The Real Shift: Last year Office made Microsoft $10 billion worth of profit (Windows made $11 billion), but with more people openly thinking about the Google alternative because of its ability to foster collaboration, Microsoft has found itself defensively competing on Google’s turf to protect their golden goose. I am very excited to see what come out next.