Rare glimpse on the economics of software companies with scale.
It’s believed the Mac BU currently employs around 180 people whose products — including Office, Messenger, and Remote Desktop Client — combine to generate over $350 million in revenues each year.
Say the average person’s annual cost is, say, $US150k. That’s 27m. Even with a lot of marketing spend that’s a good return.
When pressed for details, a spokesperson for the Redmond, Wash.-based software giant would say only that the company expects to release new versions of Office for Mac every 2 to 3 years.
I was hoping the days of 3+ year releases were gone. Seeing the progress that web office companies like Zoho are making in months - imagine how far they’ll go in 3 years.
OSX is being updated every few months. 10.5.4 is almost here. 10.5.3 had quite a few new features. So complexity is no excuse.
I’ve been playing a around a bit with web office tools. The collaboration features are awesome, but they are still clumsy to use. As Silverlight, Flash, AIR, Java and other web hosted runtimes roll out over the next year I’m sure we’ll see office parts that you can embed. You would have to think that’s all going to accelerate well within the 3 year horizon.
It staggers me that the biggest horizontal categories are so ripe for innovation and the door is open so wide. And the rewards for getting it right are so large.
The use-case of office documents are they are ‘hot’ for probably a day - maybe even just an hour of intense collaboration. Once a document is done, 99.99% of them never change again.
Probably 5 times a day I’m hunkered over someone else’s PC collaborating on a document. Or I’m emailing changes around that have to be in series or we have a version control nightmare. That slows collaboration and minimizes review cycles. Worse it’s embarrassing to have to go around again at the last minute. An emotional, painful response. Something you seek when looking for high value problems to solve.
It would be so good if we could use all that processing power on the desktop to deal with the rendering of multiple users attacking a document at once. Easy rollback of changes. Full tracking ability and difference detection. The bandwidth requirements are minimal as it only needs to keep a track of a few people typing and where their mouse is.
Use the power of the computer to empower across the world what people are doing next to each other everyday. It’s such an obvious scenario.
I hope that’s what the Office and MacBU teams are working on.
We are seeing innovation in this space. Zoho seems to be in front technically, speeding past Google. The experience the web guys are gaining in collaborative editing will be invaluable. But I wish they would work on fat client versions as well. They seem reluctant to charge. Hard to find any pricing info on Zoho. I think they should charge so they can accelerate investment.
These numbers show it is a high value space. New entrants getting close to the sacred cow will hopefully drive faster innovation in Office.