End user unrest over Microsoft's enterprise licensing plan may prompt some companies to move from Microsoft Office suite to rival Sun Microsystems's personal productivity suite, StarOffice, predicts Gartner.
Gartner is estimating that StarOffice has a slightly better than 50-50 chance of taking 10 percent of the office productivity suite market --at Microsoft's expense -- by the end of 2004.
Michael Silver, a Gartner analyst, said some firms are beginning to weigh the cost and licensing terms of Microsoft's Office against StarOffice's improving compatibility with Microsoft file formats and its expected lower pricing.
Sun intends to begin charging for StarOffice 6.0 when it is released sometime by the end of next month, but it will also couple that move with support services. Pricing hasn't been announced, but a Sun official said that Gartner's per-user estimate of US$25 to $75 per user, depending on volume, is in the ball park.
"StarOffice has a chance, based on better compatibility, some mind share and Microsoft missteps," said Silver. But migration costs, end-user training and converting documents from Microsoft file formats could deter companies, he said.
Gartner's prediction of a potential 10 percent market share for StarOffice may seem small, but it may be the boldest prediction to date that there's a product with the potential to dent Microsoft's overwhelming market share of an application that's key to its desktop dominance.
But the hurdles for reaching that market share could be high.
David Morris, a senior vice president of e-business solutions at AmeriCredit Corp. in Fort Worth, Texas, is among those who have downloaded StarOffice and tried it out. He calls it "a pretty good product," but said he's not about to roll it out to his 6,000 end users.
The training and infrastructure costs associated with moving end users to a new personal productivity suite is just too big a barrier, said Morris. "We don't think there are viable alternatives," he said.
But another end user attending Gartner's Symposium/ITxpo here, Mike Thiele, associate director of corporate IT infrastructure at Gilead Sciences Inc., a biopharmaceutical company in Foster City, Calif., said his company has begun looking at alternatives to Office, in part, because it doesn't want to have to rely on one vendor.
But switching won't be easy. "We're going to have to define some pretty compelling reasons," he said.
Microsoft has a monopoly in Windows operating systems, the U.S. Court of Appeals in the District of Columbia upheld last year, but the court didn't consider whether Office should be considered a monopoly. According to IDC in Framingham, Mass., however, Microsoft's Office market share is higher than its operating system, primarily because Office is available for Apple Computer Inc.'s Macintosh.
In 2000, Microsoft's office share by revenue for Word and Excel was about 94 percent. Windows was at 92 percent, according to IDC.
The nine states that have rejected the Bush administration settlement in the case to push for tougher remedies, believe Office is a potential linchpin for attacking Microsoft's desktop monopoly. Those states want the court to force Microsoft to auction licenses to vendors, such as Linux vendor Red Hat Inc., which would then be allowed to port Office to other operating systems.
Today, StarOffice has about 39,000 users, the largest being the U.S. Department of Defense at 15,000, according to Tony Siress, a senior director of marketing at Sun. The change to a pricing model for StarOffice is intended to let users know that StarOffice is "a committed, sustainable offering."
Gartner said that StarOffice will have its greatest appeal to those enterprises with employees who are relatively light users of Office and don't require its advanced features. Sun sees its "sweet spot" for potential customers are Office 95 and 97 end users who face migration and cost issues if they move up to later versions of Office, said Siress.
End users have long praised Office for bringing near universal standards for exchanging documents. But Microsoft's new enterprise licensing plan, announced last year, drew complaints from many firms who said it would raise their cost.
Gordon Pope, manager of network computing at British Columbia Hydro and Power Authority in Vancouver, said those licensing changes have raised concerns.
"Would I look to find alternatives to Microsoft? Absolutely," said Pope. "The concern that we have is [that] the weirdness of the licensing is costing us a lot of money every couple of years."
But Barry Cole, who heads e-business application development at Exelon Energy Delivery a subsidiary of Exelon Corp. in Chicago, said he can't see moving from Microsoft's Office.
"It's not worth the investment in time and energy to move off of it," said Cole. "We have too many other strategic priorities. Those are commodity applications at this point that don't seem to be worth spending the time, attention and risk."