Despite a strong market with several options, small businesses are still warming up to the idea of online personal productivity software.
Posted May 25, 2007
Microsoft has long dominated the personal productivity software market, easily eclipsing small, online players like ThinkFree and Zoho. But that could be set to change as Google enters the marketplace, says Laurie McCabe, vice president for SMB insights and solutions at AMI-Partners. The market intelligence firm's recent study, "Will Small Businesses Buy the Online Office," found many small businesses immediately think Microsoft Office when considering such software. The survey's findings can help online vendors boost their user numbers.
For the study, AMI surveyed 240 small businesses in the United Kingdom, the United States, Brazil, and India. It found that 38 percent of U.S. respondents, 50 percent of UK respondents, and 53 percent of India respondents were unaware of online personal productivity software options beyond Microsoft Office. Interestingly, only 8 percent of small business owners in Brazil hadn't heard about other options.
"We found out most small-business people don't realize there's such a thing as other packages out there," McCabe says. "They've been using Office for a long time and they think that's all there is." But Google's entry into the online productivity space will ramp up awareness.
With Google bringing its name and popularity to the sector, small businesses are more likely to look up other online vendors like the ThinkFrees and the Zohos that traditionally have had a hard time getting word of their products out. "Google's going to give the idea exposure," McCabe says.
Still, small-business owners will ask what an online package can do for them and take into account the all-important hassle factor before signing on. And they'll definitely weigh price and compatibility issues before they adopt an online productivity tool.
Many respondents told AMI they'd accept advertising if the software were free. And many sought a hybrid model, in which they can run the productivity software both on their personal computers and as a service accessed online.
Other issues that small business owners said prevented them from using online applications include security threats and fears their online software wouldn't be compatible with their PC software.
AMI found that online vendors can accelerate customer adoption by promoting the benefits of their productivity suites, offering advanced document creation capabilities, assuring users their solutions are fully compatible with Microsoft Office, and distributing their software through manufacturer and retail chains.
AMI also surveyed respondents on the price point they'd accept for an online application. "A lot of people said they'd use an online application if the price was discounted below Office," McCabe says. "With the discount, they got interested."
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