Can Oracle OpenOffice put a dent in Microsoft Office?

It’s been a bad couple of weeks for Microsoft. Whether Steve Ballmer knows it or not, the big shoes left by 23-year-veteran Bob Muglia, who oversaw major successes by the company’s Server and Tools division, will be devilishly hard to fill. And just last week, Microsoft lost Windows consumer marketing boss Brad Brooks to Juniper; worldwide government general manager Matt Miszewski to Salesforce; and Johnny Chung Lee, one of the key researchers behind the Kinect motion control technology, to Google.

On the heels of Ray Ozzie and Stephen Elop leaving Redmond, those recent departures may seem like a very bad sign. But the degree to which Microsoft is really in trouble depends largely on the viability of alternatives to its most popular products.

[ See InfoWorld’s take on the top 10 Microsoft Office 2010 features for business users. | InfoWorld’s Neil McAllister gives an in-depth first look at the beta version of Microsoft Office 365. ]

Take, for instance, Microsoft Office. I’ve written quite a bit about the Google Docs alternative, which I believe will be a viable solution for second-tier users once Google bakes in HTML5-based offline capabilities. But what of the higher-functioning desktop rivals to Microsoft Office based on the OpenOffice.org core?

For the past few weeks I’ve been using Oracle OpenOffice.org 3.2, which came bundled with the 10.10 version of Ubuntu I installed on my netbook a month ago. It’s a capable clone of Office 2003 (that’s right, no Office 2007/2010 ribbon) that, for my limited purposes, does a pretty good job.

Yes, there are many missing features as well as some major annoyances, led by infuriating formatting toolbars that pop up in the way of your work and shortcut keys that seem to function only some of the time. But here’s the bottom line: Although I can’t save documents in Office 2007 format, I can open them and save them in what an OpenOffice.org dialog box calls “97/2000/XP” format. This retained all the formatting of the 2007 docs I was working on, including some decorated tables, which I later opened and edited using Office 2007 without a problem.

This is significant for a couple of reasons. Most people are likely to have a similar experience — only in rare circumstances will 2007 formatting fail to survive a downgrade to “97/2000/XP” format — which means you don’t need to save in ODF. And Oracle OpenOffice.org constantly pushes you to save in “the latest ODF file format,” probably because Oracle now charges $90 for the Oracle ODF Plug-In for Microsoft Office, a filter that used to be free (this bit of profiteering gave rise to the LibreOffice fork).

Now, I realize some of you are snickering because you’re convinced Oracle is out to kill open source — after all, various Solaris, MySQL, and Java episodes point in that direction. But Oracle is bound by very clear open source licensing constraints in the case of OpenOffice.org. Plus, as demonstrated by Solaris Express, the company likes giving away stuff for free as a gateway drug, whether or not it is truly open source. OpenOffice.org, a descendant of Sun’s StarOffice, is not free but is cheap at $49.95 for the Standard Edition, roughly one-tenth the full retail price of Office 2007.

The biggest indication Oracle may be serious was the announcement of Oracle Cloud Office in mid-December. At the time, exact details on Cloud Office were scarce (InfoWorld’s Woody Leonhard derided it as “just a demo“). But the Oracle website recently posted more details — and the bits are actually downloadable. Here’s what’s clear so far: Cloud Office basically competes with Microsoft SharePoint, with collaborative features and the Oracle equivalent of Office Web Apps included. And just like SharePoint, Cloud Office is meant to integrate with the vendor’s desktop office apps.

However, while Microsoft is moving to a subscription-based, per-user/per-month model — with the option to have Microsoft host Exchange, SharePoint, and Lync servers — Oracle Cloud Office is meant to run on customer servers exclusively and comes with a perpetual license. In other words, the “cloud” in Cloud Office is the private cloud. And Cloud Office isn’t cheap: It costs $90 per user with a minimum of 100 users, plus $19.80 per user for the first year of support. Moreover, it requires Oracle OpenOffice Server, a “document processing solution” that costs $5,500 per processor (plus $1,210 for the first year of support). Add the cost of OpenOffice.org Enterprise Edition for the desktop, and for the whole shebang you might easily pay $300 per user.

Ah, Oracle, king of the hidden costs. Does anyone need a Microsoft Office clone at Microsoft prices? And who would you expect to be more ingenious at figuring out new ways to make you pay through the nose for software, Oracle or Microsoft? Can we call it a draw?

All this may indicate why Oracle seemed happy to let the LibreOffice folks go. You don’t want to make money? Fine, see ya. We’re going to capitalize on the OpenOffice brand and make a bundle, or at least try to.

A side note in Oracle’s favor: Cloud Office’s support for mobile devices will undoubtedly be better than that provided by SharePoint or what we’ve seen so far from either Office 365 or Google Docs. Oracle’s enterprise applications were among the first to support the iPhone; Microsoft seems hellbent on just supporting Windows Phone 7, a platform not yet ready for enterprise use.

One sign OpenOffice may be making Microsoft nervous is a series of video hit pieces released last October comparing Microsoft Word, PowerPoint, and Excel to OpenOffice.org Writer, Impress, and Calc. And who knows what IBM may be cooking up with Symphony, its own free-as-in-beer version of OpenOffice? As Microsoft customers squirm under the yoke of ongoing Office licensing and maintenance costs — and the jury is still way, way out on Microsoft’s risky Office 365 play — the desktop productivity market may be thrown open in a manner we haven’t seen in decades.

This article, “Can Oracle OpenOffice put a dent in Microsoft Office?,” originally appeared at InfoWorld.com. Read more of Eric Knorr’s Modernizing IT blog, and for the latest business technology news, follow InfoWorld on Twitter.