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'Microsoft Office has changed as people's work has changed, and the alternatives for the most part have aimed to meet the needs of the past.' That said, Microsoft Office continues to be the overwhelming choice for a broad range of organizations and individuals,' said Jacob Jaffe, director of Office at Microsoft. 'Competition is good for the industry and good for customers. It is also developing Office Live, a set of online services that complements Office and is aimed at small businesses.Ī Microsoft spokesman on Tuesday said that Office meets its customers' needs because the company continues to invest in it. Last week, it made a version of its Office suite available to students for $60. Microsoft has shown some signs of reacting to the full-court press it's seeing from competitors. On Monday, the European Commission ruled in favor of regulators in an antitrust case that could change how Microsoft does business in Europe. Microsoft failed to get its Office Open XML formats certified as ISO standards through its accelerated process earlier this month.

'I think there's some blood in the water between Microsoft not getting its Open XML (Office document formats) fast-track standards approval and the European Commission ruling,' said Michael Silver, an analyst at Gartner, referring to two recent Microsoft setbacks. Analysts expect Microsoft to retain the great majority of its Office customers as it adjusts its product development to the Web and open source, even as competitors try to siphon off its Office revenue. The flurry of investment in productivity software points to technology and business changes in the IT industry that are making Microsoft's cash cow vulnerable to alternatives, particularly among small businesses and consumers.īut don't expect Microsoft coffers to start draining tomorrow.

Meanwhile, Google on Monday introduced Google Presentations, an online version of Microsoft's PowerPoint presentation application that complements Google's Web-hosted document editor and spreadsheet. Separately, on Monday afternoon, Yahoo said that it paid $350 million to acquire Zimbra, a start-up that developed a Web-based e-mail and collaboration package comparable with Microsoft Exchange and Outlook. The computing giant, which has been challenging Microsoft's desktop dominance for years, said that Lotus Symphony is a standards-based alternative to Microsoft's proprietary Office. IBM on Tuesday announced the release of Lotus Symphony, a suite of free desktop applications based on the open-source product. After years of watching Microsoft rake in billions of dollars from its desktop software franchise, its competitors are pouncing.

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