Microsoft Corporation (MSFT): King of the Office?

Now, some feel its better than Microsoft Corporation (NASDAQ:MSFT) or Apple offerings, as it just needs a Google Inc (NASDAQ:GOOG) account for access and it comes with the Google cloud service.  Others feel it comes the closest to Office in terms of being user-friendly, which gives it a massive advantage.

Interconnectivity

Given the developments between Apple’s iWork, Google Docs, and Microsoft Office, it seems that it isn’t the differences that matter most, but more the interconnectivity. Each of these products are available on the companies’ web browsers, but Google’s cloud is the most developed out of the three.  And that’s because Office still has problems moving into mobile media and iWork is still trying to gain traction.

The main investment advice that can be taken from this is more about the value of free versus a pay service. With Google Drive, the features come simply via a Google+ account, and the Office like software works the same basic way as Apple and Microsoft products.  This would represent a huge blow to Microsoft in terms of lost revenue from its main client pool.

The numbers

As a result, buying into Google could be a solid move.  It has a cheap forward P/E of 16.52, and a high profit margin of close to 25%.  Many analysts feel adding business software will help get Google get to the next level.

Apple might be cheaper with a forward P/E of 9.45 and a healthy ROE of 33%.  Another plus is that Apple’s iWork is but a small part of its vast ecosystem.  And that means its failure won’t have as much of an impact on its top or bottom line.

Microsoft Corporation (NASDAQ:MSFT) will be most affected by any shake-up in the business software industry.  It relies on Office, it’s the crown jewel.  And anything that messes with it, could mess with the stocks price.

Foolish final thoughts

Microsoft has always been a leader in business communications, and the fact that it took this long to come out with an Office app is a bit surprising. With Google and Apple coming hard, Microsoft Corporation (NASDAQ:MSFT) must get back to the drawing board if it wants to remain the king of business software.

The article Microsoft: King of the Office? originally appeared on Fool.com and is written by John McKenna.

John McKenna has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.