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Microsoft Office has always been held up as the epitome of Microsoft development order as opposed to client operating system development where things are much more exciting. Perhaps some reconsideration is in order as Microsoft today announced a schedule slip for Office 2007:
“Based on internal testing and the beta 2 feedback around product performance, we are revising our development schedule to deliver the 2007 system release by the end of year 2006, with broad general availability in early 2007,” a Microsoft representative said in an e-mail.
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It said in March that the product would be ready by this October, but said at the time it was delaying the retail availability until January, in order to jointly launch the product with Windows Vista.
The plan was to have a big joint launch and marketing campaign, but that’s apparently off unless Vista is similarly delayed.
“We are assessing the impact this timing change will have to our specific launch plans,” a Windows unit representative said, adding that Microsoft is “still targeting January for general consumer availability.”
Heck, the Vista folks probably wouldn’t mind a delay too, but there are some other people who would:
Gartner analyst Michael Silver noted that the delay in Office could hit some businesses hard, particularly those that signed volume license contracts in late 2003. Such Enterprise Agreement or Software Assurance contracts offer, among other things, the right to any new versions of the product that come out over a period of time, typically three years.“Each month they miss is another group of customers that renewed EA or SA in 2003 that got no new version of Office for their payments,” Silver said. “It was just March when Microsoft emphatically stated that Office 2007 would be on the October price list. Even at close range, they can’t forecast this stuff.”
The Microsoft mantra is that neither product will ship before its time, which is all to the good, if rather more imprecise than one would wish. I doubt that this will make any substantial difference to Microsoft’s financials, but it’s the kind of ego knock that is sometimes harder to take.
Google today launched Google Checkout and despite the rumors that it was a “PayPal killer,” it’s not really a payment system, but an identity and payment processing system that is available to Google affiliated merchants across the Web to speed customer purchases. Saul Hansell at the NY Times:
The company is introducing Google Checkout today, a service that will allow users to make purchases from online stores using payment and shipping information they keep on file with Google.Google’s aim, said Eric E. Schmidt, the chief executive, is to make it easier and faster for people to buy products advertised on Google ? thus attracting more advertisers.
“The goal here is to make it be one nanosecond from the time the customer decides to buy to the time the transaction is complete and the product is on the way,” Mr. Schmidt said.
For consumers, this sort of service, often referred to as an online wallet, is hardly new. Microsoft, AOL and Yahoo have offered similar wallets, which proved to have limited appeal. While the PayPal service of eBay has attracted widespread use, it offers additional features like the ability to transfer money from checking accounts.
That is, in addition to identity, PayPal has significant payment features for consumers including a PayPal “account” replenished from a checking account or credit card as well as the ability to write “e-checks” from a regular bank account.
But for merchants, the service comes with a twist: Google will waive some or all of the transaction fees for companies that buy advertising from it. That may give the service a leg up on competitors like PayPal and several smaller companies that help online merchants accept credit cards.
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Google is charging merchants 20 cents plus 2 percent of the purchase price to process card transactions, less than most businesses pay for credit card processing. Banking industry executives say that credit card processors typically pay MasterCard and Visa a fee of 30 cents and 1.95 percent for every purchase, so Google will be subsidizing many transactions.What is more, for every $1 a company spends on search advertising, Google will waive the fees on $10 worth of purchases. Factoring in the 2 percent fee, that represents a rebate of at least 20 percent of advertising spending.
Mr. Schmidt said the company was willing to lose money on transaction fees because it felt the package would increase advertising spending.
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Advertisements on Google.com from companies that accept Google Checkout will display a small image of a shopping cart. Clicking on the ad will take customers to the advertiser’s Web site, as it does now. When customers decide to buy something, they will be offered the option to sign into Google Checkout and use the credit card and address information on file there. Customers that do not have accounts with Google will be encouraged to set them up.
There’s more in the article including the expected benefit to Google of obtaining more demographic information about Web shoppers in order to better serve ads to them, much like one of the promised benefits of Microsoft’s adCenter. Forrester Research’s Charlotte Li has more on the benefits and summarizes it this way:
So hopefully you’re beginning to see the virtuous circle that Google is building with Checkout and how it supports the core search business. It’s brilliant – by tying the wallet service to search, Google creates a huge incentive for its retail advertisers to participate. This is what differentiates Google Checkout from other wallet services …
Offhand, it looks like Google has pulled an interesting looking rabbit out of the hat. Also notice that Google Checkout is not a beta, but has been fully launched and is ready to rock and roll although admittedly it’s version 1.0 with all that implies. In any case, the bar just got higher for the other big search and commerce players like Microsoft.
Owen Thomas at Business 2.0:
Vic Gundotra, a general manager for platform evangelism at Microsoft and a 15-year employee, has agreed to join Google after first spending a year working on charitable endeavors, Business 2.0 has learned.“Mr. Gundotra has resigned from Microsoft and entered into an agreement with Google,” Google spokesman Steve Langdon wrote in an emailed statement. “He will not be a Google employee for one year and intends to spend that time on philanthropic pursuits. We are uncertain what precise role he will play when he begins working for Google, but he has a broad range of skills and experience which we believe will be valuable to Google.”
Microsoft spokesman Tom Pilla confirmed Gundotra’s departure and says that the executive has a noncompete agreement with Microsoft preventing him from working for a competitor for one year after leaving the company.
Gundotra had been charged with getting developers to write programs that build on top of Microsoft’s desktop software and online services. Most recently he had been working out a strategy to compete with the draw of Google’s newer, Web-based software applications.
Niall Kennedy and Robert Scoble elaborate on Gundotra’s work at Microsoft. If you can’t beat them, joining them is a good option.
Meanwhile at Mini-Microsoft, the public weblog that attracts a good deal of anonymous internal Microsoft “water cooler chatter,” there are rumors of further executive changes plus Microsoft Reductions in Force (RIF).
Ina Fried at CNET has the story, but here’s the net:
- Senior VP Orlando Ayala takes a new position reporting to COO Kevin Turner as head of the Emerging Segments Market Development Group which “is charged with spearheading efforts to ensure that Microsoft makes a real, positive difference to people and Governments all around the world as digital inclusion in underserved communities, both in emerging nations and developed countries, becomes an increasing fundamental for economic success in the global economy.” This sounds like a lot of PR smoothing the way for Microsoft sales in these untapped markets which have their own special problems.
- Eduardo Rosini takes Ayala’s old job as head of the Small, Medium Services and Partner group which handles sales to smaller businesses and the partner program. He was formerly the Regional VP in charge of Microsoft APAC, which is Microsoft’s Asia Pacific unit.
- Marketing for Microsoft’s unified communications effort, which was announced earlier this week, will be under Chris Capossela, who heads product marketing for Office.
- Development of Dynamics CRM is moving from Microsoft Business Solutions into the Office Business Platform group headed by Kurt DelBene.
- Last but not least, Microsoft is still searching for a replacement for Microsoft Business Solutions honcho Doug Burgum, who announced plans in November to shift to an evangelist “chairman” role in MBS (see also [1]) once his successor was found. Could it be that leading the perpetually troubled MBS doesn’t look like much of an opportunity?
