I am probably not the only one out there wondering if there will be a 2009 Office 2.0 conference.  Certainly, I could just ask Ismael instead of this post.  If the event does not happen this year, it may be because of Intalio's explosive success.  Or perhaps because last year was a little quieter, and less energy-filled, than 2007.

 

But upon reflection, it isn't because Office 2.0 is dead or over.

 

With Microsoft having recently bought "office.com" and finally preparing to launch its own, 100% web-based simplified version of its Office suite, one could argue the battle was won, much like Salesforce.com's battle for "no software" clearly is over (hence, their need to shift to a cloud paradigm, since the world pretty much agrees SaaS is fine for most enterprises and businesses).

 

In fact, thinking about it, I would propose it's about a 10-12 year journey.  It seems to me there are two ways technology and software experience paradigm shifts.  The first is to create a new category or experience that did not exist before.  When done right, this can explode.  Look at Facebook or Twitter's or YouTube's growth in just a few years.

 

Office 2.0 however is not about doing something never possible before.  Even its most exciting elements, collaboration and visibility, exist in on-premise solutions in one form or another.  Rather, it's about making your core business applications 10x more useful than before, with the web as the vehicle to do so.

 

digitalphotos10-12ys

Those paradigm shifts, from one way of doing something, to a new way (vs. a brand new segment) seem to take about 10-12 years.  Take a look at digital photography for example.  The switch took over 10 years to go mainsteam.  In the beginning, analog film was hardly broken.  But now, it's somewhere between a joke and the refuge of an extremely small number of art photographers.

 

Looking back at Office 2.0 circa the end of 2005, it was defined by Ismael in a very narrow fashion, as a sort of Network Computer 2.0 used to run core businesses applications entirely on the web.  A nichey concept at the time.  Today, that idea has become mainstream and even so obvious to not even to be a distinct concept.

 

Penetration, however, remains similar to where digital photography was around 2001.  We are 30-40% along this journey and road.  Whether there is an Office 2.0 conference this year or not (in its past form), I'd challenge us all to rethink how we can collaborate together on its next phase, from mainstream to ubiquity.

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Amidst the unprecedentedly horrible news in the auto industry today (GM down 49% in January), Subaru announced its U.S. sales were up for a second month in a row, up 8% in January.

 

I am hearing similar stories from my peers in SaaS and Office 2.0 who are "Subaru-like".  A number of them have had record Q4s and strong Januarys.   At EchoSign digital signature, were were up 250% YoY in January, for example.

 

No business is immune to the recession, but certain Office 2.0 players will outperform due to the "Subaru-effect":

 

* Unique functionality that people want to buy even now (for Subaru, the hot new Forester which doubled, more than making up for the old models, which withered)

* Instantly cost-effective with no need for ROI calculators (for Subaru, maintaining affordable financing options, for Office 2.0, cheap pay-as-you-go)

* Growing a small base in a large market (Subaru isn't Toyota - it hasn't maxxed out its market share, nor have almost any Office 2.0 start-ups).

 

To be clear, Office 2.0 isn't immune to this dramatic downturn.  But services (such as our own EchoSign digital signature solution) that provide clear ROI, minimal risk, and which play in large markets can continue to grow and thrive.

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It is an understatement to say how rapidly things have changed in the global economy in the past 60 days.  In the last post on the blog, we discussed the impact of AIG and Lehman on the enterprise buyers.  Now, those seem like the good old days, with even Google now having lost confidence in its ability to execute in the short term.

 

But the global recession will actually truly and finally focus the role of Office 2.0 technologies.  An early thesis was that the value proposition around Office 2.0 was a combination of (1) free and/or dirt cheap and (2) collaboration.  Free actually is harder to give away in a down market.  The reason being that any product, even free, requires an investment to understand a new business process, and a new product.  When businesses of all size are struggling to make their plans, there isn't much incentive to experiment, and free isn't enough to make up for any perceived distraction from protecting the core business.

 

Collaboration per se, while core to the Office 2.0 thesis, loses a huge portion of its perceived value in a downturn.  Much of the boom in SaaS, Office 2.0 and webservices in 2007 and 1h '08 was around improving efficiencies in scaling organizations.  When organizations instead shrink, communication is probably actually even more important -- but investment in communication whose ROI is tied to faciliatating growth is essentially dead.

 

So where does that leave Office 2.0?  In an extremely interesting place that was almost unthinkable in 2006 (where many saw it almost as a joke or a hobby for webheads). Office 2.0 in Q4 '08 and 2009 is and will be about (x) increasing and (y) protecting revenue.  That is the only place money, and effort, will be spent.  We're seeing this firsthand at EchoSign, where paid customers are accelerating -- not to bring order to their business processes (the 2007/1H '08 theme), but rather, to protect revenue, to close that ever-rarer beast, the ready-to-buy customer, with an electronic signature before they change their mind.  I would expect our friends at Freshbooks for example are seeing a similar trend.

 

Forget about cost savings from Office 2.0.  Instead, the Office 2.0 that leaders have revenue-centric ROI that can be measured instantly, or in days, will thrive.

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This year's theme of taking Office 2.0 into the enterprise was a good and timely once with terrific speakers and case studies.  However, I wonder if the theme will be as on point in 2009.  With HP laying off 25,000+, Dell and others forecasting large IT cutbacks, and the implosion of the largest buyers of IT software, financial services ... I would posit the hope for Office 2.0 2009 is the SMB.  With the VSB the target of 2006; the early adopters for 2007; and the enterprise for 2008, hopefully 2009 will be the time for the traditional laggards, the overworked and underresourced SMBs, to adopt Office 2.0 more rapidly.  I believe we are seeing a very rapid and fundamental shift in Enterprise 2.0 buying habits from "bring it inhouse now, it's dirt cheap and great and works now not later" to more traditional ROI analyses with much longer sales cycle and cost justifications.  Combined with IT spend freezes spreading across companies as I type, the enterprise boost for Office 2.0 may prove to be just that -- a boost but not the long term driver of adoption and change.

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Office 2.0 is without a doubt the most enjoyable conference/confab of the year.

 

Good karma and good things come from this.

 

Last year, I had the privilege of speaking on an early panel at Office 2.0. Perhaps it was 7:30am. Goodness, whenever it was, it was early. In the stupor of my early morning drive up from Palo Alto, I accidentally left my laptop bag in a hotel public area before I spoke. About halfway through the panel, I had that sinking feeling when I'd realized what I'd done. Sure enough, when I finished up, the bag was gone. Stolen. Taken. Gone.

 

Because of Office 2.0 technologies and vendors, my laptop was not a concern. My data was all in the Office 2.0 cloud — Salesforce.com; EchoSign; Zoho Writer; Hosted Outlook Exchange (Intermedia), TypePad, etc. I could just pick up another computer back at HQ.

 

But my keys were in the bag as well... argh. The car up in San Francisco. The office in Palo Alto. The home even further south. And no spare... Office 2.0 technology hadn't figured this out yet.

 

Fortunately, the good karma of the Office 2.0 Conference resolved even this pickle. After a desperate search for my bag, I informed the Office 2.0 conference staff. Somehow, ten minutes later, my laptop bag (keys intact) had been recovered from the St. Regis lobby, where someone had "borrowed it" — and was on the way out the door — but was miraculously apprehended in the lobby.

 

Magic. Good karma. The Office 2.0 Conference.

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At EchoSign we're extremely pleased to be attending our third Office 2.0 conference. For us, the theme this year was spot on — the focus on Enterprise adoption. What a change from 2006, when Ismael's report back was that Office 2.0 was primarliy a solution for VSBs (very small businesses) — and not yet ready for large co. adoption. What a change 2 years make! We saw it at EchoSign, with early wins after Office 2.0 2006 with BT, GE, Rite-Aid, and a handful of others... and then saw the trend accelerate for real right after Office 2.0 2007, where the enterprise was clearly interested... to now where 30% of our customers are enterprise, growing with a bullet: TimeWarner, Qualcomm, Comcast, Alltel, XO, and on and on.

 

This dramatic change is fueled by two rapid evolutions of Office 2.0. The first, is while in 2006 Office 2.0 apps were not as robust as traditional apps, today they are actually more so. Your data is safer; downtime is painful, but relatively minimal; horizontally scaleable infrastructures and cloud computing eliminate storage and compute cost barriers; and Salesforce.com proved that web services, by being more configurable, can in fact be more powerful and thus better suited to the enterprise than a traditional app. A power Salesforce.com or EchoSign user can configure these apps to do magical things.

 

The second is economics. To put it simply, large enterprises get a smokin' deal with Office 2.0 apps. Now that they are robust, reliable, feature-rich and clever, large enterprises can take advantage of these apps and buy them at a small fraction of the price of old school competitors or a home-grown app. And since web apps are more and more configurable, enterprise customers can likely get them to do more or less what they want. For 10-20% of the cost. With far fewer headaches.

 

Again, cheers and a great topic. In just two years, Office 2.0 has morphed from a fringe idea used by VSBs and championed by this guy with the Frenchish accent whose name everyone mispronounced, to a game changer for hundreds of thousands companies and enterprises of every size. In another 2 years, nothing will be done the old way.

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