Although Microsoft has ownership of the globe's most used office suite, the company appears to be feeling threatened by competitors who are offering similar suite software -- for free -- to users.

Microsoft released a report last month that identifies California-based ThinkFree, a company that offers "free, small, medium featured (word processor, spreadsheet, presentation, address book, e-mail client, file manager), use online or offline."

According to BusinessWeek Magazine, to regain its market share from companies such as ThinkFree, Microsoft is now considering an online version of MS Works.

Possibilities and Challenges

MS Works, which usually plays second fiddle to Microsoft's ubiquitous Office Suite, currently brings in revenue of $2 per copy from PC makers, on average. Additionally, the average user uses Works for 3 years. Keeping these figures in mind, Microsoft has determined that more money could be generated by giving the product away for free (using ad generated revenues).

A challenge that Microsoft may face is that consumers are getting increasingly more disenchanted with advertisements being so prevalent on the Web. Therefore, the ads that are included in the Works package will have to be presented in a sophisticated, non-threatening manner. (Source: zdnet.co.uk)

One Step at a Time

Microsoft's VP of the Business Division Product Management Group, Chris Capossela, said that although the company's strategy is yet to be determined, "it's not a small number [of people working on the project] to be sure." (Source: businessweek.com)

It is speculated that there won't be any big decisions made regarding the direction of the MS Works possible online revamp until after the launch of Microsoft Office 2007 (due early on next year).

A Microsoft spokeswoman noted that the plan for MS Works is not set in stone and that Microsoft is brainstorming about what to do next. The crucial decision for Microsoft is to determine what form or forms the new reincarnation of MS Works will take on. It is possible that the software may be a solely Web-based hosted offering, or, it may also become an ad-supported download or software program. (Source: zdnet.co.uk)

Currently, all we know is that MS Works will transform in some way in 2007.

An Essential Initiative

Although the project is in its early stages of development, Capossela emphasized the importance of beginning to compete with free Web-based office programs: "This is core. We want to win this space." (Souce: businessweek.com)