I just saw the announcement that Google is backing away from support older Microsoft Office file formats. In many ways, this is a non-event. It only affects people that use both pre-2003 Microsoft Office and Google Apps. On the other hand, it is symptomatic of why Google doesn’t take a lot more share away from Microsoft Office–they don’t understand compatibility and the user behavior patterns associated with switching core products that have persistent data formats.
Compatibility is an all-or-nothing prospect. If you’re trying to take a powerful incumbent out, you have to make the transition frictionless. Not being able to load a file is about as much friction as you can ever hope to see. Having it load imperfectly so you have to manually deal with the differences is almost as bad.
I’ve written about this problem before. It isn’t that hard to build a product that’s 100% compatible with Microsoft Office. It’s been done before by companies a lot less successful than Google and Microsoft moves so slowly it’s not like it is a moving target they’re shooting at. The mystery to me is why Google doesn’t just buckle down and get it done.
Probably a typical Big Company Fail: Google Apps doesn’t have the priority to ramp up but they don’t want to cancel it or they’re just too arrogant to see their problem and think this will force a big wave of adoption of Google Apps. More likely it’ll just force more people to buy later versions of Office, or sign up for the relatively inexpensive new Microsoft subscription service.