Impressed though I am with Office 2007 …

Its clear that Microsoft spent too long on Office 2007 fighting its historical desktop rivals through the introduction of a new user interface, file format, programming model.  These platform investments provided some user benefits but most importantly wrong footed competitors who had previously concentrated on cloning (which is a lot easier than developing) Microsoft Office capability.

However their focus on competing with the past resulted in them missing also completely the fact that there was a whole new crop of competitors who were not interested in simply cloning, but wanted to re-invent the whole office experience as a simpler, more collaborative, service based experience. 

I have no doubt that Microsoft has the ability to compete in this space technically, but it will require such a disruption of its current revenue stream that it will be a difficult management trick to pull off.  That said Microsoft does seem to understand and management disruptions with some skill and whilst commentators (like me) might criticise them for their lack of innovation there’s little evidence in their revenues (right now) that they are mismanaging this disruption.

Time will tell …