OpenAI goes for Microsoft’s jugular — its Office productivity suite
The relationship between Microsoft and OpenAI, once the biggest bromance in the tech industry, has deteriorated so badly that the companies are now mulling taking “nuclear options” against one another — actions that could seriously damage both companies.
At issue is how much Microsoft’s $13 billion investment in OpenAI will be worth if OpenAI goes public, as it plans to do. The companies are locked in an increasingly bitter battle over how Microsoft’s investment should be valued.
OpenAI has already hinted at moves that could get the US government to prosecute Microsoft for AI-related antitrust violations, which could force the company to spin off its AI products. Microsoft, in turn, might shut off negotiations with OpenAI, putting any IPO — and the company’s future — at risk.
Now OpenAI is going straight for Microsoft’s jugular: It’s considering launching a productivity suite with generative AI (genAI) tools built in, a direct attack on Microsoft’s multibillion dollar Microsoft 365 office suite business.
OpenAI’s plans for a productivity suite remain hush-hush, but some details have leaked. Here’s what we know now, and what the consequences of launching one might be.
What might OpenAI’s productivity suite include?
The little reporting done about OpenAI’s suite says it will focus on collaborative document editing, include automated meeting transcriptions, have team chat capabilities, and be tightly integrated with ChatGPT.
Beyond that, little is known. Will it have a full suite of applications, including a word processor, spreadsheet, presentation software, and email? Will there be more than that, along the lines of Microsoft’s Clipchamp for video creation, or Project for project management? What collaboration capabilities would it have? And how would it all linked to genAI?
Most important of all: What in the suite would make enterprises abandon Microsoft 365 or Google Workspace for OpenAI’s offering? So far, mum’s the word.
At first glance, it seems as if there’s little room in the market for a third enterprise-focused office productivity suite. Google and Microsoft take very different approaches to their suites, which leaves OpenAI with very little to offer that either of them doesn’t have already.
Microsoft takes a maximalist, everything-plus-the-kitchen-sink approach with Microsoft 365. Each app is stacked with so many features, there’s very little they can’t do. When was the last time you needed to print envelopes or do mail merges? Probably never. But they’re available in Word if you want them. The same holds true for all the other apps in the suite.
Google has taken a different approach. Workplace isn’t nearly as feature-rich as Microsoft 365, but Google’s collaborative tools are much better than Microsoft’s.
With such a clear differentiation, it’s relatively easy for enterprises to decide which suite they prefer: Microsoft 365 for a full feature set, Google Workspace for collaboration.
That seems to leave no room for an OpenAI’s productivity suite. It’s unlikely to improve so much on Google’s traditional collaboration tools or Microsoft’s feature set that it can gain a foothold. Trying to split the difference between the suites and offer a wishy-washy application somewhere between the two won’t help at all.
So, it’s likely OpenAI’s suite will play to its strengths and offer genAI-centric collaboration for creating, editing, and finalizing documents, possibly turning the way people create documents on its head. Rather than have a single author write a document, then send links to others so they can collaborate on editing it, OpenAI’s suite might well use collaborative AI from the get-go, allowing people to use AI prompts together to create documents from scratch. They would also collaboratively edit it using AI. It could also use genAI-guided brainstorming and even genAI graphic-creation tools as well.
This way, the suite won’t need to replicate Microsoft 365’s bells and whistles or take a back seat to Google Workplace for collaboration. It could be pitched as the future of the genAI-driven workplace.
Follow the money
Just as no one knows the exact feature set of the suite, no one knows how much OpenAI might charge for it if it’s launched. Pricing is one area where Microsoft is extremely vulnerable. Enterprise versions of Microsoft 365 cost anywhere from $7.75 per user per month to $35.75 per user per month, depending on the feature set. Adding Microsoft 365 Copilot costs $30 more per user per month, tripling the cost of Microsoft 365 with AI for some companies — and doubling the price or more for most others. Given that many enterprises have thousands or tens of thousands of Microsoft 365 users, that’s a tremendous price increase.
Beyond pricing, it’s not clear that workers in enterprises are particularly taken with Copilot’s capabilities. Bloomberg reports that ChatGPT is far more popular with enterprise workers than Copilot, and that companies that have bought Microsoft 365 Copilot are having serious problems convincing their employees to switch from ChatGPT to Copilot.
That doesn’t mean, of course, that companies will be willing to abandon Microsoft 365 for a new OpenAI productivity suite. But it does offer OpenAI at least an opening. And if it lowballs the price of its productivity suite at $10 or $15 a month per user, that would be a big incentive for enterprises to at least test it out, given that many have to pay more than $65 per month per employee for Microsoft’s office suite with AI included.
The upshot
We don’t know much yet about the OpenAI productivity suite, or even if the company is serious about launching it. It could be that the company is only using the threat of selling it as a bargaining chip in its negotiations with Microsoft.
Either way, though, Microsoft should be worried about OpenAI’s suite. If Microsoft wants its AI investment to pay off, it’s going to have to get serious about improving Microsoft 365 Copilot to fight off the potential challenge from OpenAI.Apple to pour $500M into US rare earth supply for iPhones – ComputerworldRead More