iWork '08: The Next Step in Apple's SMB Push?

Tuesday Aug 21st 2007 by John Welch
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iWork '08 is aimed at the people Microsoft Office has left behind, and when you look at the SMB market, that's a lot of people with a lot of money.

As everyone in the Mac universe knows, the latest version of Apple's productivity "suite," iWork '08 now has a spreadsheet application, Numbers. Of course, this has lead many to speculate what this means for Microsoft Office, in particular, the upcoming Office 2008. However, I'm not sure that's really framing it correctly.

I don't think iWork '08 is a direct shot at Office on either Windows or the Mac. That would imply that Apple is taking a Microsoftian turn here, and designing a product to "beat" the competition. Anyone looking at iWork '08 for more than ten minutes will realize that, no, it doesn't "beat" Microsoft Office, or even Open Office. The list of differences is huge, including full read/write round-trip support for Microsoft's OpenXML format.

But Apple is not Microsoft. They don't design applications based on what the competition is doing. Oh sure, they keep the competition in mind. So Numbers can deal with Excel files, Pages talks to Word, and Keynote talks to Powerpoint. Pages gained Word-compatible change tracking. But that's more of a nod to user convenience.

Take a look at Numbers. That application is not designed to woo hardcore enterprise Excel users. Even outside of a complete lack of automation/macro capability, Numbers doesn't have as many formulae, etc. Pages can't deal with things like embedded spreadsheet objects a la Word. Yes, I can copy and paste data from Numbers into Pages, but I can't embed a spreadsheet into Pages, make changes in Numbers, and have those changes propagate to the Pages document. Numbers has no macro or scripting facility, so you can't do the kinds of automation that are common for Excel documents in the enterprise. Really, the only application in Office that iWork beats coming and going is PowerPoint. Keynote just destroys it. But that's really the only one.

Apple's not stupid. If they wanted to make Numbers a competitor for Excel, or even a reincarnated Improv, they could have. If they wanted to make Pages into a Word-beater, it's not beyond their abilities. They couldn't do it "with ease," but Apple could do it. So why didn't they make iWork '08 a competitor for Office?

There's a laundry list of reasons why, but my current favorite is that Apple isn't after the enterprise business market. (By "enterprise business", I mean companies and corporations with over a thousand computers. Higher Ed certainly resembles an enterprise, but it's different, and Apple does well there.)

Microsoft Office has, over the years, become an excellent enterprise product, especially when you add in things like Sharepoint and Live Meeting, nee Netmeeting. (I'm really not sure what it's called anymore, Microsoft changes names so fast, you need a telepathic link to Redmond to keep up, and no one pays me that well.) Microsoft Office is no longer a product, but rather an infrastructure that is built with the enterprise in mind. (This is one reason why if the OpenOffice people think that simply having a competitor to Word/Excel/PowerPoint/Access/Outlook is going to make them king of the productivity suite mountain, they need to get outside and get some oxygen.)

However, as Office becomes a better fit for big enterprise, it starts to lose its attraction to the SMB market. Face it, Word really is intimidating as heck, and overblown for what I'll risk saying is a majority of SMB needs. Sharepoint for a fifty-, or even a hundred-person shop? Consider all the requirements for Sharepoint. They're rather huge and expensive. Same thing with Outlook, which really only shines with Exchange, which requires Active Directory, and then you need IIS for webmail...

The truth is, Office is becoming less and less of a good product for the SMB market, especially on Windows. On the Mac, it's a better fit, but that's only partially due to product design. The truth is, a lot of what WinOffice does simply requires Windows. So MacOffice is still a decent choice for the SMB market, but it's a mix of targeting and accident. But even without the infrastructure overhead, Excel on the Mac is still Excel, Word is still Word. They're big semi-truck applications, with the kind of learning curve you have when you learn to drive a semi.

Enter iWork '08. It's not trying to beat anything. It's not even all that integrated, not compared to Microsoft Office. What it is however, is a collection of the stuff that people in the SMB market are most likely to need. A solid word processor that can round-trip most Word files. A spreadsheet application that covers the most common use, and can deal with a large percentage of Excel files. A presentation application that can make the worst tripe look at least decent, if not good. You can use every feature in iWork without ever needing a groupware server, a directory services implementation, a collaboration server, a videoconferencing server, etc., yadda.

Since a trial version of iWork ships on new Macs by default, you already have it. So that means, with no applications that are designed for experts, by experts, companies that don't want – or aren't able to deal with – all the back-end that Office really wants can still get work done, and have it look good. They can juggle numbers, and if needed, they can make some great presentations. Mail and iCal and Address Book aren't Outlook, but then again, you can get their full feature set for a lot less time, money, and aggravation than you can with Outlook.

I think Apple has looked at Microsoft Office, especially Office 2007, and instead of saying "Wow, we need to beat them," they're saying "Wow, they've really forgotten the SMB market, especially the "S" part, and that people want to be useful without thousand-page manuals, and classes, and directory/server infrastructures. Microsoft Office has, over time, gradually stopped being all that great a choice for the SMB market, especially on the Windows side, and become something that will do anything you want, but at a price.

iWork '08 is saying "You don't have to pay that price. You don't have to buy an H2 just to drive to the store to pick up a quart of milk. You don't have to become a civil engineer just to put together Ikea furniture. There is another choice, and we have it." Even allowing for converting from Windows to the Mac, when you add up all the costs of the infrastructure WinOffice really wants, especially with Office 2007, iMacs are not much of a penalty after all. Not making your IT setup really complicated will save you most of that money on its own.

So no, I don't think iWork '08 is any kind of shot at the Microsoft Office infrastructure and/or the enterprise. Rather, I think it's aimed at the people Office has left behind, and that is, when you look at the SMB market, a lot of people with a lot of money. That is who I think iWork '08 is aimed at, and if I'm right, Apple stands to do extremely well over the next few years.

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