The final decision to build the “Word Web App” rather than “a new web-based word processor from Microsoft that is not fully compatible with Word” (and similarly for Excel, PowerPoint and OneNote) was strongly driven by the belief that the file formats continued to serve as a critical competitive moat with immensely strong network effects.
Complexity and Strategy
Terry Crowley

It’s their incentives, so it makes sense – but this is as much the reason we use Google instead, as any.

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