Can portals offering free Web-based desktop applications turn the tables on Microsoft?
As more portal sites add free or low-cost business applications to their services, Microsoft finds itself in an awkward position: The software giant needs to launch a Web-hosting model for its Office desktop productivity software to counter competitors and maintain its huge customer base. It also needs to set prices that keep Office’s enormous revenues–one-third to one-half of the company’s total–rolling in. In a sense, Microsoft finds itself in the same position Netscape Communications encountered a few years ago as it attempts to sell software that others are giving away. Netscape, which led the Web browser market by a huge margin with its for-fee Navigator software, eventually gave way to Microsoft’s free Internet Explorer. In the short term, analysts expect Microsoft to take a hit. “This [move to Web-hosted applications] represents both high risk and high opportunity for Microsoft,” said Rob Enderle, an analyst with Giga Information Group. It “will require that they cannibalize t
