Microsoft makes big break from tradition with Office for iPad
In a significant break from a longstanding Microsoft tradition of creating services primarily for its own platforms first, the company Thursday announced Office for iPad, its suite of productivity apps that have been optimized for touch and for use on Apple’s market-leading tablet.
Seattle Times technology reporter
In a significant break from a longstanding Microsoft tradition of creating services primarily for its own platforms first, the company Thursday announced Office for iPad, its suite of productivity apps optimized for touch and for use on Apple’s market-dominating tablet.
The Office for iPad apps — Word, Excel and PowerPoint — went live Thursday morning in Apple’s iTunes App Store.
The apps are free if users only want to view and present documents, spreadsheets and slides.
But users who want to create and edit documents will need a subscription to Office 365, Microsoft’s cloud version of its market-dominating productivity suite. (Cloud refers to services and data that live on remote servers and can be accessed by users online.)
The Office for iPad apps come free for Office 365 subscribers.
The announcement, made at a news briefing Thursday in San Francisco, was the first official media event for Microsoft CEO Satya Nadella since he took over last month from former CEO Steve Ballmer.
Nadella called Thursday’s announcement an example of the “magical coming together of the cloud and mobile.”
The Office for iPad launch also marks Nadella’s first big move toward realizing his “mobile first, cloud first” vision for the company — one that recognizes Microsoft has to be far more open to other platforms, with products designed to work seamlessly with rival companies’ operating systems and services.
Making Office available for Apple’s iPad marks a significant shift away from Microsoft’s practice in the past few decades of centering its offerings on Windows. (A notable exception early in Microsoft’s history was Office for Mac, which Microsoft offered at a time it was trying to expand its own user base.)
The thinking for years at Microsoft was that its products and services — including cash cow Office — had to bolster and protect its core Windows franchise, still the dominant operating system used on PCs worldwide.
But at a time when PC sales are declining and mobile devices have become pervasive, Microsoft’s presence and relevance in computing has decreased. The overwhelming majority of the world’s smartphones and tablets run on Google’s Android or Apple’s iOS operating systems, rather than on Microsoft’s Windows, Windows RT or Windows Phone.
At Thursday’s briefing, Nadella said Windows is still “a massive agenda for us. We will innovate.”
At the same time, he said, “we are absolutely committed” to making the company’s applications run well cross-platform.
“It is about being able to excel everywhere our customers are,” Nadella said.
Microsoft has been wrestling with the dilemma of whether to offer its marquee productivity suite on competing platforms — thereby gaining more users and revenue for Office — or keep it primarily for its own platforms. That would protect Windows but risk losing scores of potential Office users.
Some on the Office team have reportedly been working on a version of Office for iPad for years, and Microsoft presumably could have launched one years ago. But others at Microsoft still held that a touch-optimized Office for tablets should be launched on a Microsoft device and platform first.
Launching Office on the iPad was “something that Microsoft really needed to do,” said Al Gillen, an analyst with research firm IDC. “I’m not sure it would’ve happened with Steve Ballmer at the helm.
“This was not a technology challenge for Microsoft,” Gillen said. “This was a marketing decision. It could’ve happened long before now. But it didn’t.”
Extending to mobile
Microsoft’s initial response to the rapid rise of mobile was to extend its PC market dominance into the mobile market with Windows 8, an operating system the company touted as optimized for touch-based mobile devices and mouse-and-keyboard PCs.
Instead, many users found Windows 8 jarring, with two markedly different ways to interact with the operating system: one, the traditional desktop interface; the other, a tile-based design that worked well with touch.
That strategy to compete in the mobile world “has not worked,” said David Cearley, an analyst with research firm Gartner.
Thursday’s announcement, Cearley said, “I view as the first major statement in the market from Satya on what his mobile first, cloud first agenda really means,” Cearley said.
“The changes that Microsoft put in place last year, even under Ballmer, started recognizing that Microsoft was playing in a more heterogeneous world where they had to consider other platforms and other environments and other vendors in this new age of personal computing,” Cearley said.
Nadella’s announcement is “a much more aggressive embracing of mobile in a Microsoft and non-Microsoft world,” he said. “That, combined with this delivery of an Apple version of [a touch-optimized Office] before a Microsoft version reinforces the notion that Microsoft will be looking at a more heterogeneous and comprehensive model in the future.”
But even as Microsoft makes this shift, Gillen predicts there may still be some resistance within the company.
Launching Office for iPad might be good for Microsoft revenue but bad for some divisions or products.
“What happens to Surface 2 if this is wildly successful on the iPad and customers no longer feel like they have to buy a Microsoft device to get a good Office experience on a tablet?” Gillen said. Surface 2 is Microsoft’s own branded tablet, which comes with a version of Office already installed.
“And what does that mean for Windows RT,” he continued, referring to the less-powerful version of Windows 8 designed for tablets running on battery-saving ARM chips. Windows RT tablets have not sold well.
If Office on iPad is successful, “it could potentially be fatal” for Windows RT, Gillen said. “To the extent that Office goes on some device other than a Windows device, in the end, that’s a sale of a Windows client license that didn’t happen.”
Office 365 subscription
Also a question is whether Microsoft was wise in requiring Office for iPad users to have an Office 365 subscription.
Subscriptions vary in price by version. The Home Premium version (to be renamed “Office 365 Home” soon) — the one many consumers have and which allows use on five PCs or Macs and up to five tablets — costs about $100 a year or $10 a month.
Microsoft also recently announced Office 365 Personal, which allows for connections to one PC or Mac and one tablet. That version, coming sometime this spring, will be priced at about $70 a year or $7 a month.
Requiring an Office 365 subscription to edit Office documents may “be a non-starter for a lot of people,” Gillen said. “iPad customers have been taught to expect apps that cost $1 or $2, with really expensive ones at $15 to $20. Microsoft’s coming along and expecting $100-plus per year. For many consumers, I think that would be a price point that is unrealistic.”
But for those consumer and business customers already subscribed to Office 365, “it’s a no-brainer,” Gillen said.
Still, even though Office 365 is doing well and gaining a lot of traction, “there are a lot of businesses that don’t have Office 365,” said Gartner analyst Cearley.
Most people are still using a traditional, non-subscription version of Office installed on their PCs.
“What Microsoft is trying to do is get those people to shift to the subscription model,” Cearley said. “It remains to be seen whether people will buy it.”
The company Thursday also made free the Office Mobile apps for iPhone and Android phones. Users of those apps will be able to view and edit documents without an Office 365 subscription.
And the company announced new or updated services for corporate IT departments, including Enterprise Mobility Suite, a set of cloud services to help businesses manage data and services on employee mobile devices. It also announced the upcoming availability of cloud-based access and identity management service Microsoft Azure Active Directory Premium.
Janet I. Tu: 206-464-2272 or firstname.lastname@example.org. On Twitter @janettu.