For obvious reasons, Microsoft is extremely reluctant to touch the business model of its money-spinning Office suite, despite the fact that competition from free, web-based services is increasing. Not only is Microsoft unlikely to introduce a web-based Office anytime soon, the official line from the company is that software-as-a-service isn’t what customers want, but that software+services is the ideal model. Of course, nobody else in the industry seems quite as excited about software+services as Microsoft is, which probably has something to do with the fact that such a model would leave the company’s overall business model intact. That being said, the company has apparently released a new ad-supported version of its Microsoft Works suite, the company’s low-end productivity suite. However, the company still isn’t delivering it over the internet. This is sort of an odd compromise. For one thing, consumers won’t be particularly enthused by ad-supported desktop software. Faced with a choice between this and Google’s productivity offerings, they’ll likely choose the latter. If Microsoft were to make Works the backbone of a web-based offering, it’d be a different story. The fact that the company isn’t doing this sort of makes you wonder whether Microsoft is really fearful, to use an old cliche, of validating the market. Perhaps it believes that by releasing an on-demand Works, it would draw attention to this whole area, thus benefiting the competition. If so, this strategy can’t work for long. It’s only a matter of time before consumers learn more about the options available to them, and it’s up to Microsoft whether it wants to follow the direction its customers are likely to go.

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