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Edition: U.S. Article Comments (1) Save Email Print Reprints Most Popular Most Shared Memo to boss: 11-hour days are bad for the heart 11 May 2010 WRAPUP 7-Executives trade blame as oil gushes in U.S. Gulf 11 May 2010 Niecy Nash no longer "Dancing with the Stars" 12:39am EDT WRAPUP 1-Big oil to get more grilling as oil gushes in Gulf 1:29am EDT Obesity task force urges action 11 May 2010 Playboy raises the bar with 3-D centerfold 11 May 2010 GLOBAL MARKETS-Euro slips on EU debt woes, Asian stocks soft 11 May 2010 Cameron leads Britain into new coalition era | Video 3:17am EDT SEC says no single cause of market plunge 11 May 2010 BP tries a new Gulf spill fix, as slick spreads | Video 10 May 2010 Memo to boss: 11-hour days are bad for the heart 11 May 2010 Food-stamp tally nears 40 million, sets record 07 May 2010 Playboy raises the bar with 3-D centerfold 11 May 2010 FACTBOX-Five areas of Greek budget waste 28 Apr 2010 Nuts' anti-cholesterol effects stronger for some 10 May 2010 WRAPUP 7-Executives trade blame as oil gushes in U.S. Gulf 11 May 2010 Thai army turns up the heat on Bangkok protesters | Video 3:07am EDT North Korea claims nuclear fusion, prompts skeptics 11 May 2010 WRAPUP 1-Big oil to get more grilling as oil gushes in Gulf 1:29am EDT USDA looks to reduce foodborne illnesses in poultry 10 May 2010 Microsoft updates Office, vies online with Google Bill Rigby and Alexei Oreskovic NEW YORK/SAN FRANCISCO Tue May 11, 2010 6:47pm EDT Related News Google's Android takes No 2 spot from iPhone Mon, May 10 2010 UPDATE 1-Google's Android takes No 2 spot from iPhone in US Mon, May 10 2010 Google expands venture group, wants more deals Tue, May 4 2010 Google expands venture group, wants more deals Mon, May 3 2010 Google expands venture group, wants more deals Mon, May 3 2010 General view of Microsoft Corporation headquarters in Issy-les-Moulineaux, near Paris October 6, 2009. Credit: Reuters/Charles Platiau NEW YORK/SAN FRANCISCO (Reuters) - Microsoft Corp launches an updated version of its Office software on Wednesday, aiming to keep its grip on the hugely profitable business application market while countering the challenge of free online alternatives from Google Inc. Technology | Media The world's largest software company is upgrading its popular Word, Excel, Outlook and PowerPoint applications, and rolling out its own online versions to keep up with the new class of mobile, web-connected users that have emerged since the last upgrade in 2006. Most are expecting the Office franchise -- which Microsoft says has 500 million users -- to retain its dominance in the business world. But Office could be facing the beginning of an erosion of its "must-have" status. "Every time Microsoft releases a new version of Office, they get a bump up in revenue," said Toan Tran, an analyst at Morningstar. "But how big of an upgrade is this? They might have a harder time getting people to update." Microsoft is expected to trumpet a list of improvements on Wednesday, such as editing photos in Word, using video in PowerPoint, collaborating on documents and managing e-mail conversations in new ways. But the most interesting facet is Microsoft's move into the "cloud" -- allowing users to manipulate documents stored on remote servers from anywhere -- where Google has been setting the pace. "They're coming into our playing field," said Dave Girouard, the Google executive leading the company's charge into business applications. "They (Microsoft) have conceded that this is the future and now we think our products and services will get a lot more consideration." Google Docs -- stripped down versions of Microsoft's core programs -- are available over the Internet with no need to download software. They are free for personal users and $50-per-user per year for companies. Google says it has picked up 25 million users since launching almost four years ago. That is only a fraction of Microsoft's 500 million, but is growing quickly. "Word and Excel are pretty secure -- Excel is embedded in an uncountable number of business processes, so that would be pretty hard to rip out," said Tran. But Microsoft faces more pressure in email and calendar programs, the areas most amenable to online and mobile use, where Google already has a strong foothold. "Google has made a lot of inroads there. Microsoft is going to face pressure there over time. They are probably going to have to cut prices to some extent," said Tran. That could put the brakes on one of Microsoft's most formidable profit engines. Microsoft's business division -- which gets 90 percent of its sales from Office -- averages around $2.8 billion profit per quarter. That is 47 percent of Microsoft's total profit so far this fiscal year, second only to Microsoft's core Windows franchise. Businesses account for the vast majority of that. According to the latest data from tech research firm Forrester, 81 percent of companies are running Office 2007, compared with only 4 percent using Google's online equivalent. A Forrester poll indicates almost a third of existing Office users plan to upgrade to Office 2010 -- which will be available to them from Wednesday -- within 12 months. Ordinary consumers get the chance to buy Office 2010 next month, at prices ranging from $119 to $499, depending on the level of sophistication. It will take at least a year before it is clear whether Microsoft has a winner and the extent to which customers are migrating to online versions and lessening reliance on installed software. "Google is not the threat that it will be once the 'virtual desktop' becomes a no-brainer," said Richard Williams, an analyst at Cross Research, referring to the practice of accessing software over the Web. "That's the time Microsoft really has to worry about." (Reporting by Bill Rigby and Alexei Oreskovic; editing by Andre Grenon) Technology Media Comments See All Comments (1) | Post Comment May 11, 2010 10:03pm EDT The one that has the most duality for local and remote usability wins imo. Until networks are pretty much metaphorically like the power grid, the local aspect can’t be ignored. (Statement is more geared for the consumer market than the commercial market where up times are already somewhat a mainstay). avgprsn Report As Abusive See All Comments (1) Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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