Online services threaten Microsoft's future

The Google/Sun alliance could seriously challenge Microsoft Office

Microsoft faces its biggest future threat from internet services such as Google's growing list of applications, according to industry analysts. 

"Looking at Microsoft's announcements recently you have to wonder what's going to happen to the corporate desktop. I have a theory that they are going to be under threat in the next three to five years," said David Ferris, principal analyst at Ferris Research. 

Ferris maintained that the Google/Sun alliance could seriously challenge Microsoft Office and prompt corporations to dump Redmond. 

"Most corporations have to use thick client computers mainly because of Office. It's one of the few remaining thick client applications that the average corporation uses," said Ferris.

Malte Nuhn, an analyst at Millward Brown Optimor, added: "A lot of the things people used to do with standard applications that ran on the operating system are now being done online. The web has become a de facto virtual operating system." 

However, Nuhn believes that Microsoft is trying to address this area. "As the web becomes a more powerful platform, and the bandwidth speeds are high enough to support this, I think we will eventually see these applications moving online to subscription-based models," he said.

"If Google and Sun could get their act together and get the thin client version of OpenOffice up and available for when Vista kicks in then you could see a big defection," said Ferris. 

However, Ferris felt that it might be too soon for this change at the launch of Vista and may not happen until the next version of Windows.

"If we look at how long the internet has been around and how much it has grown in terms of the technological capability to deliver, I think that the industry is far from mature. There's still a huge potential and we will see these things shifting gradually," said Nuhn.