Amazon May Have Plans to Take on Microsoft in Office Applications

Amazon May Have Plans to Take on Microsoft in Office Applications

Amazon is already a huge player in e-commerce and the cloud. Does it also want to join the productivity suite wars against Microsoft? 

Amazon may be looking to expand beyond its huge and powerful music and video services, e-commerce and cloud service provider businesses to take on Microsoft in an entirely new direction by creating its own version of the Microsoft Office productivity suite.

Rumors about such a development have been swirling for several months, according to a February report by The Information, which said that Amazon Web Services (AWS) has been "working on upgrades to its WorkMail email-calendar app and its WorkDocs file storage-collaboration app to make them more attractive to corporate customers," according to details provided anonymously by two people who do business with Amazon. "AWS has also told some large corporate customers it's considering bundling these apps with its recently launched Chime video conferencing apps into a new productivity app suite that will compete with Google G Suite and Microsoft Office 365," a source who allegedly had been briefed on the plans told The Information.

Amazon did not respond to several email inquiries from ITPro seeking comments about its potential plans for an office competitor in the marketplace that would take on Microsoft, Google, LibreOffice and others.

Several IT analysts, however, said that while they are generally skeptical about such plans by Amazon, it would at least be possible that the company would take such a leap into another new direction.

"I've heard rumors but initially discounted them," Charles King, principal analyst for research firm, Pund-IT, told ITPro in an email reply. "The list of challengers to Microsoft Office is pretty long but their results have been anything but pretty. Entering the fray would be difficult for anyone, including Amazon, but the company has a history of pursuing counter-intuitive strategies."

King said he could imagine Amazon at least considering the idea of moving into the office suite marketplace as competition in cloud computing stiffens and AWS growth appears to be reaching a plateau. "The market leverage that Microsoft and Google enjoy due to their respective productivity suites must seem extremely attractive," wrote King. "With few other 'magic bullets' on the horizon, Amazon's management may have decided that investing in offerings analogous to Microsoft's and Google's may be the only way it can fully compete against them."

A key problem for Amazon, though, is that if it does decide to move forward on such plans, "its starting point will be far behind Google and Microsoft – in a different Zip code, practically speaking," wrote King. "Microsoft Office has a long history and deep penetration with businesses, and Microsoft has done a terrific job of using its Azure cloud service to evolve Office solutions and extend their value. Google's cost-efficient Docs offerings have strengthened the company's Chrome OS and Chromebook solutions, enabling Google to establish a formidable presence among thrifty educators and in classrooms."

At the same time, however, King said he wouldn't count Amazon out entirely. "I never say never – Google, after all, occupies a market position in education that Apple used to command. But I believe that if Amazon enters the market, the road ahead will be difficult, at best."

Another analyst, Rob Enderle, principal analyst at Enderle Group, calls the rumors "a bit of a stretch," even for Amazon, but that he can see some possible scenarios for such thinking inside the company.

"Microsoft's offering has been pretty static and it doesn't even conform to Windows app guidelines with regard to how it works," while Google largely provides a cheaper version of Office, wrote Enderle. "That suggests that there is an opportunity for someone of scale to create a product that does for productivity what Echo did for music in the home," he said.

"Amazon employs a lot of ex-Microsoft folks so it is likely there are a core group of folks who may have been frustrated that Microsoft didn't allow them to do what they thought needed to be done" and who could be behind the efforts, said Enderle.  

Amazon does like to step into areas where there is opportunity due to an unwillingness for existing firms to challenge the status quo and advance, Enderle added. "AWS surprised IBM, Echo surprised Apple, and their drone delivery efforts, even though not implemented yet, have scared the hell out of Fed Ex and UPS," he said. "This could be their way of showcasing what Microsoft should have done."  

Dan Olds, principal analyst with Gabriel Consulting Group, called the Amazon office suite rumors "kind of interesting in a stupid way."

Since the rumors surfaced back in February, they have apparently not received lots of attention in the IT industry, Olds told ITPro. "I don't give this an awful lot of credence myself because this doesn't make much sense for Amazon to do that unless they have a lot of people with a lot of time on their hands. Amazon should stick to selling Microsoft Office rather than try to compete with it."

Building a competing product, especially having to try to catch up with existing competitors, is something that would be a huge challenge for Amazon, he said. "This isn't in their wheelhouse. This is software that people depend on and it takes a lot of design work and upkeep to keep it useful. I don't know what makes them think they can do a better job."

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