Open-Xchange: Killing Microsoft Office Softly With Kindness?

Open-Xchange is launching OX Documents, a cloud-based office productivity suite that includes OX Text, an in-browser word processing tool that adds direct editing capabilities for Microsoft Word .docx files and OpenOffice or LibreOffice .odt files, and offers real-time collaboration features to improve workflow and efficiency. The German-based open-source software (OSS) developer plans to release Presentation and Spreadsheet additions later this year, said CTO Rich Landsman.

Developed by members of the original OpenOffice development team, OX Text provides non-destructive support of Office and OpenOffice or LibreOffice file formats, enabling XML based documents to be read, edited and saved back to the original format at a level of quality and fidelity previously unavailable with browser based text editors, he said. That means when you reopen the document in Word it is formatted as originally intended, without any alterations, format corruption, data loss or errors.

OX Documents is a new feature of the OX App Suite, a cloud portal providing tools for management of email, applications, calendar, social network profiles and documents, accessible via any web-enabled device. Due out next month, the suite takes advantage of HTML5 to deliver a consistent user experience, across mobile and desktop devices, said Landsman. A demo version is available.

“With App Suite and OX Documents, we’re creating a one-stop shop where somebody can integrate all of their apps at one site.” To actually be able to deliver that is really, really critical, said Landsman.

The 100% HTML5 capability takes full advantage of local storage, both online and offline, he said. “Another critical feature is Responsive Design, so that applications morph or change depending upon screen size and device.”

Founded in 2005, the company’s cloud-based messaging and collaboration application, also known as Open-Xchange, is used by more than 70 million clients at 3,500 businesses, governments and educational institutions and by large web host and telecommunications providers, said Landsman. In Europe they have four of the five top hosting companies, and about to sign up the fifth; globally, they have about 50% of the hosting companies, he said, and a lot of those 70 million users don’t even know they’re using them.

The bulk of their business comes out of Europe, about 66%, but Landsman said the biggest growth is coming and expected to come from the US – about 25% of its business – and Asia. In addition to hosting and ISPs, it focuses on cable companies, mobile carriers, IT distributors, system integrators, and hardware and software OEMs.

“Strategically we feel that we’re exploiting a gap created by companies like Microsoft who used to have a very successful strategy, selling through the channel. Lately they’ve been abandoning that to go direct, so we’re really focused on the channel for go to market.”

And also unlike Microsoft and other developers, OX doesn’t develop any of its own back-end technologies. “We’re 100% focused on the user application side, the front end.”

While 70 million users is a significant installed base, it is just a small fraction of the overall market, and market leader, Microsoft. At Microsoft’s most recent quarterly earnings call with analysts at the end of January, it reported that over 60% of enterprise desktops worldwide are on Windows 7, and over 60 million licenses of Windows 8 have been sold. Business Division revenue grew 3%, and there was an 18% bookings growth and near historical high renewal rates for Office.

A month later Microsoft announced a broad upgrade to the online version of its Office suite of business software to make sure Google doesn’t make further inroads against Office, said Gartner analyst Tom Austin. Google Apps’s ability to run on any device and its simple collaboration have helped it to capture up to one-third of new users among small businesses, although enterprise wins are fewer, he said.

“In the market as a whole, Google is probably winning 20% to 25% of the new users, and that’s where it’s likely to stay unless something breaks up or breaks down,” said Austin. Of the current 600 million users of office productivity software – most of it installed on PCs – 90% use Microsoft products, he estimates. By 2020, more than 1 billion people will use a suite of office software, either online or on a device, and he expects Microsoft will have at least 80% of that market. “Microsoft still has liabilities here,” said Mr. Austin, “including trying to match Google’s rate of innovation.”

According to Forrester Research CIO TJ Keitt, both Microsoft and Google provide their clients elements of the four basic collaboration workloads: email, teaming, real-time communications, and social computing. ‘The differences in the portfolios, however, reflect the unique origins of the offerings and the divergent visions of the vendors. Office 365 is indicative of the delicate balance Microsoft is attempting to strike between embracing an online services model while maintaining on-premises software which serves a sizeable customer base. Google Apps embodies the Mountain View, CA, search giant’s belief in a web-based services world in which the vast majority of business applications are tuned to the browser and multiple mobile operating systems.’

Like Google, and now, to an extent Microsoft, OX plays in the cloud, and promises new releases every few months, instead of the more common annual-plus approach of premise-based suites. And as an open source proponent, it said the intersection of cloud, mobile and Big Data can only be OSS. Amazon and Google are betting everything on this and rightfully so.

One could say the distribution of Apps via app stores is the beginning of an open-source distribution model for individuals to create software vs. proprietary companies. Data sits at the core of this rise in user-created software: a need for a better experience and more freedom in sharing one’s own data. Economies of scale are at the core of innovation vs. economies focused on profit. Open source is about deploying the build-measure-learn feedback loop into all business systems regardless of whether or not it’s built by a lean startup.


Author: Steve Wexler

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