Who needs Office? SaaS cuts into the behemoth

In a Web 2.0 world, who needs a full-blown word processor and spreadsheet?

Google Apps "don't have the best word processor or spreadsheet we compete with; we get more competitive pressure from OpenOffice and StarOffice than we do from those guys," Ballmer said. OpenOffice, from OpenOffice.org, is an open source office software suite that goes head to head with Microsoft Office. It is based on StarOffice, which is offered by Sun Microsystems at a lower price than Microsoft's offerings.

Responding to Gartner analyst Smith's comment that half of 400 users surveyed by Gartner yesterday said they were using Google Apps, Ballmer replied "the real statistics are people try, they don't use."

However, Ballmer tacitly conceded that Google Apps are hurting Microsoft in at least one area. University students, who are "the leading edge of all consumerization phenomena" use Office but "when it comes to sharing stuff they use Google Apps, which is why we're moving to Office Live," he said.

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