How come I can't let go?
I'm between two worlds
~Tom Petty, Between Two Worlds

As I watched vendors navigate the changing software world last week at Enterprise 2.0 in Boston, it struck me that the old companies are trying desperately to hold onto to the markets they have dominated for so long. I listened as executives from IBM, EMC and Microsoft tried their best to convince everyone that despite their old-world pedigrees (or perhaps because of them), they were the best choice for facing the new world of Enterprise 2.0, collaboration and sharing. To be fair, all three companies have introduced products and services in an effort to compete in this shifting world, but as I listened to them I couldn't help but feel they were between two worlds unable to make that final leap into the future.

Collaboration is the Key

BusinessWeek has a very interesting article which will be its July 6th cover story called Microsoft Defends its Empire. It's an apt name because Microsoft faces threats from many venues and while it is still a rich and viable organization, it has huge challenges ahead. Among those is addressing the increasingly collaborative way we work. One theme that came up continually at Enterprise 2.0 was the idea that we are moving away from the focus on the individual worker and more on the group.

Further we are moving away from the idea of a document-centric environment to an information-centric one. This means that instead of looking for information in documents written by individuals, we are more and more going to be looking at content across a variety of sources including blogs and wikis, online communities, micro-blogging and more incremental kinds of involvement like tagging, rating and commenting. These pieces of content could have just as much information as the final document a team might produce (if indeed there is one) and the new kinds of tools must take this into account.

Here Comes 2010

Microsoft understands this on one level anyway. According to the BusinessWeek article the next version of Office will focus on collaboration, groups and sharing, but even while they slowly make their way towards the next version, lots of other vendors are already in the game with free or low-cost alternatives to Microsoft Office. Indeed Microsoft faces the issue of one its most profitable business pieces becoming marginalized and commoditized by upstarts and competitors, some of them quite strong like Google Docs.

Go All The Way

For now, according to the BW article, Microsoft will continue to deliver its core Office package as server-based package while offering a free neutered online version. Some may embrace the free one because they are dealing with a known commodity, but many have likely switched already to another vendor and won't give it a look. Microsoft could go all the way here and offer a tiered online pricing model and compete directly with Google at something it does well, but it's afraid of costs spiraling out of control and killing their cash cow.

Unfortunately for the empire in Redmond, whether they know it or not, the world has changed already while they stood by and defended their empire. Only by fully embracing the future can they hope to continue to compete. If not, they will not simply fade away, but their power will continue to diminish.