Albany Is a Step Toward the Future for Microsoft Office

Microsoft's private beta of its Albany subscription service is a step toward the future for Microsoft Office. Google's recent collaboration with Salesforce.com shows that the threat to Office may come in unexpected ways. Microsoft is moving to match Google's desktop-plus-Web strategy with online and downloadable Google applications.

Microsoft will launch an all-in-one subscription service for many of its key productivity applications, the company announced Friday. Code-named "Albany," the service will give subscribers instant access to the latest versions of Microsoft desktop software, ongoing security updates, and connections to Microsoft's online Office Live Workspace.

The service entered private beta on Monday, but availability and pricing information will not be available until later in the year.

Included are Microsoft Office Home and Student, which has Word, Excel, PowerPoint and OneNote, Microsoft's subscription-based digital notebook service; Windows LiveOneCare, an antivirus and firewall service; and the free Live Mail, Messenger and Photo Gallery applications.

Up-to-Date Software

A key appeal of the new offering is that subscribers will be able to download the latest versions of the applications for no additional charge. "When the next release of Microsoft Office comes out, Albany customers with an active subscription will automatically get an upgrade to this version -- at no extra cost, as part of their subscription," said Bryson Gordon, Albany group product manager for Microsoft.

"They're responding to what they perceive to be the market demand for easy access to the latest version of the software, but it's an open question as to how big that demand is," said Greg Sterling, principal analyst with Sterling Market Research. "How many people go out and buy the latest version of Office? You usually only do it when you're forced to" when buying a new computer or when a old version is no longer compatible with most other users' software.

While Microsoft Office is under growing pressure from Google's online productivity suite, Albany is much more about online delivery of updates to Microsoft's desktop software than about the online collaboration features that are at the heart of Google's suite.

A Hybrid Approach

"Albany is not the next version of Microsoft Office; it's just another way to get the current version plus other software and services," Gordon said. "We are definitely not straying from our traditional software sales model." Albany is a more flexible way to deliver software to "those customers who value having the latest and greatest version of Microsoft Office."

While Albany doesn't appear to move Microsoft's online strategy very far forward, it certainly is part of its overall approach to the competition. "This lays the groundwork for the hybrid model that they've been talking about," Sterling said.

While Google Docs is not yet a serious competitor to Office, Google's recent collaboration with SalesForce.com shows that the threat to Office may come in unexpected ways. In addition, with Google Gears, the search giant is transitioning its online apps to a hybrid model where users can work offline when they don't have an Internet connection.

Like Gears, Albany is a "transitional strategy moving Microsoft to a desktop-plus-Web offering," Sterling said. "The idea of bridging both is an important one and that's where Google is headed, too."