Taking on the Big Boys in Software

Dennis Faas's picture

Proven internet success story Sabeer Bhatia, co-founder of the Hotmail email client bought by Microsoft in 1998 for $400 million, is attempting to repeat his performance with a new venture. He is hoping to make inroads in the word processing market, principally attacking Microsoft Office's immense popularity. (Source: cnet.com)

His company, InstaColl, is set to develop a Flash-based Office 2007-like application, which will provide users with a uniquely collaborative experience. This is in keeping with Bhatia's speculation that by the year 2010, software sales on DVDs will plummet in favor of internet-based applications.  These will avoid expensive upgrades and foster collaboration amongst multiple users. (Source: zdnet.com)

However, 'Live Documents' does not represent a giant innovative leap, since it too faces competition from the likes of Google Apps, Zoho, Yahoo (Zimbra). This puts Bhatia at the back of the pack, a very different situation than the one he faced with the Hotmail email client in the early 1990s. In the case of Zoho, which has had its application running for some time, it boasts less than 500,000 users and illustrates the challenges faced by companies trying to take on Microsoft. (Source: zdnet.com)

Despite the obvious difficulties, the motivation for this scheme is undoubtedly to suck up a piece of a $20 billion business. It is estimated that only a small percentage of Microsoft Office's 500 million users have upgraded to the newer versions of the 2003 suite, which presents and opportunity for alternative applications in the near future. 'Live Documents' founder has modest goals for the web based application, seeking to achieve 1% market share of Microsoft Office revenues. If achieved, this would represent profits in the several hundred million dollar range, and would again validate Bhatia's foresight. (Source: zoho.com)

Developed in India, InstaColl has already secured its first corporate client, Aricent, an Indian software services group with around 7,000 employees. The cost per individual is pegged to be very competitive, set as low as $50 for a full year subscription, which includes over 100MB of free data storage space. The success of 'Live Documents' is aided by ingoing technological innovations such as constantly improving bandwidth, browser technology and development tools that all contribute to the creation of more sophisticated internet based applications. (Source: topnews.in)

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