Web-based Office Competition Heats Up

A major topic at the Web 2.0 Conference is the web-based office suite. The competition is getting heated, to say the least.

Many companies are throwing their bets into the ring, and several have released word processor type applications recently. One recently one was the minimalist Writeboard, released by the 37signals crew, riding an always excellent marketing job by those guys. One that seemed to have even more buzz here at Web 2.0 is Writely, which toats a more sophisticated interface and exports to Word format (a critical feature, in my opinion). There’s also Jotspot and many others.

The folks at TechCrunch have kept good tabs on the product announcements, and one of their latest reviews started a heated argument among the competitors (hat tip: Richard). Michael Arrington of Techcrunch wrote a review about a new word processor called Zoho Writer, and got replies from both the creators of Writeboard and Writely that it’s basically a ripoff of their software. (see comments after the review). They suggested that Arrington not write about people who copy their software.

All gossip aside, this signals an interesting turning point concerning all this new web-based software: direct competition. I dare say that none of these companies can lay claim to anything as their own idea, given that even I thought of a web-based office suite as a good idea many, many moons ago. (if I thought of it, then many other people thought of it many months before that). It’s not a large leap, to be sure. However, I would say that what got Jason and Sam (of Writeboard and Writely) upset was the fact that they were two of the first into the web-based app ring with their products. But whatever advantage they enjoyed being a first mover is largely gone.

I don’t mean to sound be flippant, but didn’t they expect this? Hadn’t they seen the writing on the wall, pardon the pun? This is what software development is all about (just ask Visicalc, Wordperfect, and Konfabulator), who largely innovated their respective products to usefulness and then were effectively killed off by competition from OS makers, forcing them to alter their initial strategy. Many mourn their demise, but most recognize the simple fact that there are many other software makers in the world, and far fewer obviously good ideas.

That said, their main point in rejecting the review was that Arrington hadn’t done due diligence in his analysis of Zoho, which seems correct. (It was more of a “look at this” sort of review.)

Even still, given this heated competition, there really hasn’t been any existing word-processing companies to enter the fray. When this happens, you can bet that competition will get even more fierce. Just ask any of the Blog reader makers how they felt when Google released their Google Reader software yesterday. There had to be at least an “Uh Oh”, despite all their assurances that Google is “just another competitor”.

It is safe to assume, I think, that over the next year competition in the web-based office arena will only get more heated. When this happens, I’ll still root for Writeboard and Writely because they were two of the first and most innovative, but honestly I think they have a steep hill to climb. Perhaps the comment by Sridhar , the Zoho Writer creator, seems most prescient. He responds to Jason and Sam (Writeboard and Writely), saying:

Zoho is not your threat. Wait till Google and Yahoo and Microsoft show up for the Web 2.0 party. If you believe they are not coming, I have a bridge to sell you.