The second preliminary round is between Google and Corel, for now, and clearly Apple remains in the wings with a more complete OS/Productivity strategy, as we've noted before. Let's take a look at one and then the other.
Corel: Experience and Expertise Advantage
For Corel this is old ground. They have been in the desktop productivity business for some time and outlasted IBM in this space. Their flagship product is second only to Office in most markets and second to none in the legal vertical. Corel WordPerfect Office has run against Microsoft and IBM for years, and this gives Corel a significant advantage in terms of understanding what today's market wants.
Their answer to the call for a hosted application is Lightning, a light word processor that provides just the basics and is available for free as a teaser for the full-featured product. Because it isn't seen as an end unto itself, it does feel incomplete, lacking even a spell checker at this time, but this is Corel's first entry into this space and finding a path to a product that could be funded by advertising -- and therefore rise to its full potential -- is difficult for the company, just as it clearly is for Microsoft.
Corel is the most experienced, and this means they can better target industry need, but they are also at risk of cannibalizing sales of Perfect Office, and that means they are more likely to have a product that appears incomplete. Still, their offering runs both on-line and off-line, which is better than Google's, and it feels more mature while embracing a new, cleaner user interface.
Google: Well Funded and Tenacious
Unlike Corel, Google doesn't risk cannibalizing any existing revenue stream with their offering and therefore can be much more aggressive in terms of features and functions. Once you put aside that you can't use the offering while disconnected, it appears more complete. However, and this is where Google's inexperience shows through, Google retains control over what you create and this goes to the core of privacy and trust which we'll get to in a minute.
Advantages are cost to deploy and manage, given Google handles both right now. In addition, the purchase price is comparatively low, as well. The price advantage seems clear but the risk may be unacceptable for most for the moment.
This risk goes to trust. Google has had issues with privacy and arrogance and they retain the documents that are created with their product. People even have issues with highly trusted vendors like HP and IBM retaining company documents and Google does not rise to their level. The product's cost is trivial when compared to the value of the intellectual property that Google would retain, and to make this model viable Google would need to be more trusted than any other technology vendor, and that seems unlikely given the history of this market and Google in particular.
Overall, however, Google remains comparatively well funded and this offering will undoubtedly mature over time. The real connection may be back to Apple, with that company signaling a move against Office and Google indicating they will help a combination of the technologies could be very interesting and more powerful than anything we have seen to date. Apple's dubious history with partners could be overcome by the fact that Google's CEO sits on their board, something that hasn't happened with any other partner that we can recall.
Calling the Fight
This is about experience vs. funding, and the outcome may depend on the collaboration between Google and Apple, which could create a break out product in the class and make the OS connection needed to eventually create a solution that could beat Microsoft. This has not emerged yet and Leopard will probably be too soon after this strategy was created to showcase the collaborative benefits.
But by separating Office 2007 and Vista and failing to build adequate demand for either early on, Microsoft has provided an unprecedented opportunity, one that may not reoccur in this decade or the next. The limiting factor overall is the ability to scale, quickly, a true competitive offering, and the decisions needed to do that, which would include establishing other hardware partners for the entire solution, appear off the table.
With the productivity applications part of this, Lightning needs to be more complete and a revenue stream tied to enhancements would probably be appropriate here. Google Apps needs an off-line mode and an improved ability to store documents locally or host the solution inside a company -- both should be possible.
What all of this shows, however, is the increased realization that Microsoft is vulnerable and that company could step up and address their own vulnerability. They are the entrenched vendor, after all, and this would be the easier path but, as we saw back in the '80s with IBM, companies often don't see their own problems until way too late. They do seem to be getting an unprecedented number of "wake up" calls all of a sudden, though.