The inclusion of real-time collaboration -- which is, as both Miller and Silver said, the defining feature for Google's suite -- and some statements by Microsoft officials, may signal a turn-about.
"When we launched Office Web Apps in 2010, we positioned them as a companion to the desktop Office experience," Amanda Lefebvre, an Office Web Apps product marketing manager, told Paul Thurrott of WinSuperSite last week. "[But] our intention is to shift Office Web Apps to a real, standalone Office experience on the Web."
The experts weren't buying the implication -- which has been forwarded by some pundits -- that Microsoft has long-range intentions to use Office Web Apps as an eventual substitute for Office. Not only is the latter much more powerful than the browser-based tools -- and likely to remain so as long as there are PCs -- but Office is the foundation of a very profitable business, one of Microsoft's core revenue-generating franchises that involves a host of other products, including server software, services and user- and device-based licensing fees.
It would be insane to give that up in the hope that something free, like Office Web Apps, could produce equivalent revenue through secondary sales of, say, add-ons or services, or that subscriptions to the least expensive Office 365 plans built around Office Web Apps could compensate for large-scale desertions from the pricier programs.
"Office Web Apps are an important piece longer term to Microsoft, but will remain a complement to the commercial Office," Silver maintained.
Miller saw Office Web Apps, and the improvements and additions Microsoft debuted last week, not as an end to themselves, as Lefebvre and others hinted, but as a more powerful sales tool for SharePoint, itself a multi-billion dollar revenue source. "It's SharePoint value that's important," Miller argued. "They have to keep adding value to SharePoint to continue to make it relevant."
Things are much more fluid on the consumer and very-small business sides, where alternatives to Office are plentiful and customers are far more willing to switch if they see a better value elsewhere.
"Microsoft is buying share, and trying to keep Office relevant for consumers, especially in places where they may not have [Office] installed," said Miller of the free Office Web Apps. If consumers aren't buying Office, the browser-based programs may prompt some customers to pony up for more storage space, which like its rivals, Microsoft sells. "[More capable Office Web Apps] add value to SkyDrive, and hopefully some become a paid SkyDrive customer," Miller added.
Silver echoed Miller, speculating that improved-but-still-feature-light browser apps might tempt some consumers to try out Office 365.
One problem Microsoft faces in the consumer space, unlike the enterprise, is that there is a danger of cannibalization if Microsoft improves Office Web Apps enough to make them adequate for the more casual document creation needs of a household. "Longer term, Microsoft has to worry about cannibalization," said Silver. "But the revenue involved [in consumer sales] isn't significant."
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