Office 2010 upgrade could help some cut licence fees

With Microsoft Corp. on the verge of officially launching Office 2010, some enterprises will be able to use the suite upgrade to scale back software licences and cut costs, according to an Info-Tech Research Group Ltd. analyst.


Tim Hickernell, a lead analyst with the London, Ont.-based consultancy, broke up companies into two camps: Office 2003 (or below) shops and Office 2007 shops.


In a survey of several hundred IT and business strategists, he found that 57 per cent of organizations fall into the Office 2003 column, with 42 per cent of those respondents failing to own the Office 2010 upgrade licences.


Hickernell said these shops have a tremendous opportunity to reduce the number of Office licences and evaluate alternatives such as before deciding how many Office 2010 seats to purchase. He added that Office 2003 shops which haven’t dropped Office 2010 from their software assurance and enterprise agreements should feel free to start the upgrade process immediately.


“We found that about 25 per cent of the market is able to reduce the (number of) Office licences they have,” he said. Employees such as data entry clerks, administrative assistants and manufacturing workers often use Office for its basic functionality and can easily be switched over to OpenOffice.


These IT shops will have to evaluate areas such as software upgrade costs, file format and macro compatibility, and spreadsheet complexity before making the switch, he said. The level of integration their Office or Outlook suite has with their other CRM or ERP systems should also be taken into consideration.


Ultimately, Office 2003 users cannot risk staying with the aging productivity suite any longer, if they wish to keep up with support and security patches, he said.


Hickernell advised enterprises that own 2010, but have recently upgraded to 2007, to stay put for the time being.


“They haven’t been at 2007 long enough to achieve the full return on investment,” he said. The cost of the upgrade project alone would not be worth the upgrade value, Hickernell added.


But these Office 2007 shops could also fall into the same boat as Office 2003 enterprises, Hickernell said. In some cases, the enterprise can wait out its Office 2007 licence agreements and then evaluate how they can reduce the number of seats when upgrading at a later date.


Earlier this month, Microsoft announced that Office 2010 had entered the “release to manufacturing” stage, which means the software is completed and headed toward PC-makers. The announcement came just a few weeks after Google upgraded its Web-based Apps office productivity suite in an effort to woo enterprise customers.


Google’s revamped Docs platform added a slew of collaboration features, including the ability for multiple users to simultaneously edit a documents, flow charts and diagrams. Other updates allow for more accurate importing of third-party file types, a ruler for adjusting margins, and improved imaging features.


Speaking to several hundred CIOs at its Mountain View, Calif.-based Googleplex, CEO Eric Schmidt said its Apps platform currently has “a couple million” customers with about 3,000 businesses a day implementing some aspect of it every day. “We can say the systems work at scale,” he added.


Schmidt said that enterprise computing is moving away from monolithic software toward Web-based apps


“All of us, including Microsoft, are trying to move to this Web model,” Schmidt said. He added that Google’s goal is not to fully replace the incumbents, but rather to have customers use its services about 80 per cent of the time.


But to achieve that goal among business users, Hickernell said Google faces an extremely difficult road to success. This is mostly due to compatibility issues, he said.


“Most of Google Docs usage is as a complementary product,” he said. “There is no real threat to Microsoft Office.”


Hickernell said that OpenOffice is the only credible product for hybrid deployments because of its format compatibility with Microsoft’s platform. He added that Info-Tech’s survey discovered more than 20 per cent of responding IT shops have already begun limited OpenOffice deployments.

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