Although competition is welcomed, we believe corporate buyers will not find StarOffice to be a viable option and it will not have an impact on Microsoft Office's dominant position.

Meta trend:

During 2002, organizations will pursue "contextual collaboration" strategies that enable customers, employees, and partners to plan, share, negotiate, coordinate, build community, and exchange information within applications and enterprise portals. By 2004, collaboration suites will evolve as embedded components and process-specific services within business systems. By 2005/06, collaboration strategies will exploit maturing pervasive computing platforms.

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StarOffice 6.0 is entering the office productivity market at an opportune time. Corporate frustration with Microsoft's new licensing policies and rising concerns about end-user costs are leading many organizations to closely examine Microsoft Office usage. Indeed numerous users are actively investigating StarOffice. But as attractive as moving away from MS Office may appear on the surface, companies must carefully examine the complete impact of such a decision. The breadth of the office productivity installed base means that organizations must act with great caution even when upgrading to a new version of MS Office, let alone switching away entirely. Issues with interoperability, retraining, platform integration, advanced functionality, third-party applications, and overall product direction will inhibit most companies from using StarOffice in broad production.

Investigating StarOffice

Although StarOffice competes well with legacy versions of Office (e.g., Office 95/ 97, which still hold nearly 50 percent of the installed base), newer versions of Office are shifting away from basic document creation to a broader role as the foundation of users' collaborative and information consumption environment. By 2006, we expect the MS Office suite to have shifted to become a series of tools targeted at all aspects of personal information access, including creating, searching, consolidating, and exchanging information with others. Although the focus will continue to be on the knowledge worker, Microsoft will drive Office further into all desktops by exposing more of its facilities as a Web services development platform and using its components to enhance other corporate collaboration tools. This strategy would potentially put Office in competition with other teamware products, potentially hampering its acceptance in environments that have made a strategic teamware commitment other than Microsoft. Although this would create an opportunity for Sun, we question whether it has the long-term strategic commitment to StarOffice to make the investment necessary to keep the product competitive in this changing environment. We do not see much success in the corporate market but believe StarOffice will compete well in the consumer, education, and small-business markets where Office is seen as "overkill" and interchange of documents is less important. StarOffice has had a positive influence on the market, and the threat it posed has driven Microsoft to focus attention on improving the value provided by future versions of Office. We expect that Office 11 (2H03) will be a moderate update, with more aggressive changes in Office 12 (2005).

How the product stacks up
StarOffice includes word processing, spreadsheet, and a presentation tool. However, no comparable products are available for Outlook, Access, Project, Visio, FrontPage, Publisher, or several of the ancillary components included in MS Office. For the included products, StarOffice 6.0 provides very good compatibility for the basic file formats, though testers have found that complex detailed layouts can be troublesome. Although most of the issues are trivial to fix, when multiplied by the large number of users and documents within an organization, they could still have serious productivity and cost ramifications.

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