Forrester: MS Office Still Sitting Pretty in the Enterprise

New research from Forrester shows that while the poor economy has delayed some upgrades to Microsoft 2007, most enterprises are sticking with some version of Microsoft's productivity suite over alternatives such as Google Apps.

In a recent survey of 152 IT decision-makers at companies of all sizes, nearly 92 percent are supporting either Office 2007 or Office 2003 or earlier. Only 3.3 percent use Google Apps; 2.6 percent use Sun StarOffice 8 or 9; and 1.9 percent use Lotus Symphony.

"The bottom line is that Microsoft Office works, and it works really well for most companies - maybe almost too well for those still using 2003 or earlier," says Forrester analyst Sheri McLeish.

According to Forrester's data, a large majority of companies surveyed have plans to upgrade to Office 2007, with 14 percent planning to do so in the next six months, 27 percent in the next year and 26 percent in the next two years.

The primary drivers for upgrading Office suites are that business needs demand new or different tool support (34.2 percent) and also that companies' current tools are no longer supported (23.7 percent) or are no longer compatible with external partners (15.8 percent).

At the same time, many of these plans to upgrade Microsoft Office have been delayed by the economic downturn. When asked how current economic conditions have affected Office upgrade plans, 38.2 percent of respondents said the economy has delayed plans and 5.3 percent said it has halted plans.

The report adds that next year companies will probably start making plans for either upgrading to Office 2010 or go with an alternative, particularly if they are running older versions of Office.

The report states: "Firms on older versions need to better understand their information workers' needs around productivity apps to guide licensing and consideration of Office alternatives."

But despite the pressure on cash-strapped IT departments in a recession, few said they are planning for cheaper alternatives to Microsoft Office, likely because of the legacy and interoperability of Office, says McLeish. A whopping 78.4 percent of survey respondents have no plans to implement non-Office applications.

What's worse is those companies that do use Office alternatives are not all that satisfied. In a satisfaction section of the survey with a scale of one to five (five being "extremely satisfied"), 29 percent of those using Office alternatives reported a 2, and 43 percent reported a 3.

McLeish admits that she hasn't ruled out Office alternatives for enterprises. They continue to face cost pressures and may be lured by alternatives that are cheaper and have similar or better features than Office.

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In fact, when asked what would compel their organizations to move to an alternative desktop productivity suite, 62 percent of respondents answered, "Lower license cost with similar functionality."

"The future of Office alternatives depends on bringing truly compelling innovation along with lower costs for enterprises," says McLeish. "The Google Wave offers a glimmer, but its role with Google Apps is anyone's guess."

Do not expect Microsoft to give Office alternatives an inch as it prepares to release Windows 7 and Office 2010, says McLeish.

"Microsoft isn't sitting back. There's a lot of anticipation for Windows 7 and Office 2010; firms that have been slow to upgrade are thinking about their roadmaps."

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