You cannot modify the source of Microsoft Office. Comparing office suites is an entirely different topic.
I don't see a divided community. One project is really active and alive, then a year later OOorg tries to start something else.
It seems inefficient to have this split. But that is the same for everything. Why have different languages, multiple OSes, multiple distributions, desktop environments, etc. Might be inefficient, but unless you take away peoples freedom to do what they want, I don't see this changing.
Trying to compete with Microsoft Office seems futile anyway. I'd rather have a focus on making a good office suite. It doesn't really matter if it can do everything that Microsoft Office can.