The rumor is back: New reports have Microsoft preparing a version of its flagship Microsoft Office productivity applications for iOS — which almost certainly means Apple’s iPad, as well as the iPhone and maybe even the iPod touch. Although the speculation is not new, it comes with some intriguing new details. First, Microsoft might be looking to launch a version of Office for iOS around the same time Windows 8 tablets start to hit the market. Second, Microsoft might also be working on a version of Microsoft Office for Android.
Does it make any sense for Microsoft to make versions of its Office applications for any mobile platform other than Windows or Windows Phone? Wouldn’t that undermine the value of Microsoft’s core platforms? Or is it actually a savvy move that not only gives Microsoft a new revenue stream, but helps keep the software giant in a mobile technology world that’s — so far — mostly passing it by?
The latest batch of reports have been triggered by BGR, which claims a “reliable source” indicates Microsoft plans to release its “full” Office suite of productivity applications, for but for Android as well. The loading screen on an iPad apparently said “Office for iOS,” implying that the software might also support iPhones and even iPod touch devices.
The latest reports follow similar rumors from The Daily back in February and in November of 2011. The Daily’s February report suggest the suite of iOS applications was all but completed, and ready to be submitted to Apple’s App Store in a matter of weeks. The current crop of reports has Microsoft targeting November 2012 — a launch that would seem to coincide with the initial availability of Windows 8 tablets.
It’s worth noting that Microsoft explicitly claimed the images accompanying The Daily’s February report were doctored and did not represent a Microsoft product. However, the company refused to confirm or deny reports that it was working on a version of Office for the iPad.
The current round of reports is the first time Microsoft has been reported to be working on a version of its Office suite for Android.
The case against
Does it make any sense for Microsoft to develop a version of Office for iOS or Android?
Although components of Microsoft Office are older than Windows — Microsoft Word dates back to MS-DOS days and has been around for nearly 30 years — Microsoft has built its empire on the ubiquity of its Windows platform. Windows, in turn, has directly fueled Microsoft Office as a de facto standard for productivity applications. Windows’ biggest boost to Office arguably came with the launch of Windows 95: Microsoft launched a version of Office for Windows 95 the same days it shipped the operating system, making it the only game in town for anyone looking to do spreadsheets, word processing, or presentations on the latest and greatest Windows.
The strategy worked. Microsoft cut WordPerfect off at the knees (something that’s still dogging the company in court) and, since then, there have been no serious challenges to Microsoft dominance of desktop productivity apps. The market belongs to Microsoft Office, with the likes of OpenOffice and Apple fighting over scraps. Most businesses, schools, organizations, and other major bulk purchasers of PCs don’t just buy licenses for Windows — they buy Office as well. Similarly, Office is a popular pre-installed option on many consumer PCs. That formula has been in place for the better part of two decades.
Now, Microsoft has famously missed the boat on the mobile technology revolution. We’re essentially five years into the “iPhone era” and Microsoft is only now trying to compete in the smartphone arena with its Windows Phone platform. (That’s not going so great: according to IDC, Windows Phone accounted for 2.2 percent of the global smartphone market in the first quarter of 2012. That’s only about a third the share of the troubled Symbian and BlackBerry platforms, and even behind Linux.) It’s been two years since the iPad launched, and Microsoft’s response — in the form of Windows Metro — won’t ship until the latter part of this year.
That’s reflected in Microsoft’s bottom line. In terms of revenue, Microsoft’s Business division — which can basically be considered the Microsoft Office ecosystem — is now Microsoft’s biggest moneymaker. Windows still makes heaps of money — almost $3 billion in the last quarter alone — but it’s been lagging behind the Business Division since mid-2010. For better or worse, Office is now Microsoft’s biggest revenue stream.
So, an argument can be made that producing versions of Microsoft Office for iOS or Android may benefit the Business Division, but also undermines Microsoft’s core Windows empire. If Microsoft wants to protect its core businesses, making versions of Office for non-Microsoft platforms is kind of like giving away the crown jewels. If Office is exclusive to Microsoft’s Windows platform, Windows is relevant as long as Office remains a de facto standard in business, education, and enterprise — and there’s no indication that’ll change anytime soon.
The case in favor
However, these same factors also argue in favor of Microsoft releasing versions of Office for iOS or Android. Microsoft has missed the boat on the mobile technology revolution, and even if Windows 8 and Windows Phone turn out to be unqualified successes, they are not going to make iOS or Android vanish from the face of the earth overnight. If Microsoft platforms ever dominate the technology world again like they did in the mid-1990s, it’s going to take years. In the meantime, one of the biggest problems faced by Microsoft’s core customers — businesses, governments, educational institutions, and enterprise — is how to make Windows play nicely with devices running iOS and Android. These folks can’t prevent people from bringing their own iPhones, iPads, and Android devices into their organizations — especially since, for the moment, the Microsoft ecosystem can’t really offer anything comparable.
Making versions of Office for iOS or Android essentially gives Microsoft a way to participate in the mobile technology platforms that are succeeding. Microsoft’s big volume licensing customers will be thrilled, because folks using Android and iOS devices will be able play on a more-or-less even playing field with fully-fledged members of the Microsoft ecosystem. That makes for fewer headaches for their support and IT staffs, which will have to support iOS and Android devices anyway. Everyday consumers will be happy, too. In addition to third-party options to merely view or perhaps make PDFs from Office documents, they’ll be able to use the “real” Office to create, edit, and manage documents. For folks who live in a world where Office matters, that could be a huge benefit.
Microsoft can also use versions of Office for iOS and Android as a kind of gateway drug to persuade users that buying into the complete Microsoft ecosystem provides an even better experience. Sure, Microsoft can say, you can use Office on you iPad or your Android device. But if you want the full power of Microsoft’s solutions, try it from a Windows tablet or PC. Microsoft could reserve the “premium” Office experience for users of its own platform, by holding back things like full support for Outlook and Microsoft Exchange, Sharepoint, and cloud services like SkyDrive.
Need an example? Although Microsoft Office has long been a Windows-first product, it has never been exclusive to Windows. Microsoft Office first appeared for Macintosh way back in 1989 — the first version of Office for Windows didn’t ship for another year. For years Microsoft actually made more money on each copy of Mac Office than on Windows versions — although that was probably an accounting oddity that didn’t take into account things like R&D costs. The bottom line is that making Office for a non-Windows platform has been profitable enough for Microsoft to keep doing it for essentially as long as Office has existed — and the Mac’s market share has never been very large compared to Windows.
The latest report from BGR has Microsoft prepping its “full” Office suite for iOS and Android, but that seems unlikely. The “full” version of Microsoft Office for Windows is available as several different SKUs. The core apps are Word, Excel, Outlook, Powerpoint, and OneNote, but professional editions also roll in Publisher and Access, and Microsoft also offers Project and Visio as kind of orphaned, specialized apps that are still (technically) part of Office. Office also incorporates a bunch of helper utilities and services, like Lync.
A version of Office for mobile devices is not going to be the “full” suite. Instead, Microsoft is likely to focus on just four apps: Word, Excel, PowerPoint, and OneNote.
Instead, Microsoft will most likely focus on the core Word, Excel, and PowerPoint applications. Of the three, PowerPoint would seem to face the most challenge on iOS: although PowerPoint decks may be widely used in the Windows world, the application never developed much of a following on the Mac and was almost immediately eclipsed by Apple’s own presentation tool Keynote — derived from software Steve Jobs used for his own presentations and which is already available for iOS. However, there’s no doubt that being able to pop a PowerPoint presentation onto an iPhone, iPad, or Android tablet and hook it up to a projector at a meeting could be a major boon to the apparently large group of people who rely on the app.
Word and Excel, however, enjoy special status — no version of Microsoft Office can stand without them. They’re absolutely guaranteed to be part of any Office suite Microsoft offers for any platform.
Microsoft may face a bit of a conundrum on pricing. Right now, OneNote is available for free. Unless Microsoft offers a significant upgrade to the versions available for iOS and Android, it’s going to have to keep that free price tag. Microsoft could consider making strippe-down versions of Word, Excel, and PowerPoint available for free too — it would give the company a good way to test the waters on mobile apps, and maybe work up to offering “freemium” versions where customers can pay to activate particular features.
However, it seems more likely that Microsoft would go with releasing versions of its core Office applications as paid apps for iOS and Android. Pricing will largely depend on how fully-featured the mobile versions are, but Microsoft is already facing a tight price cap. On iOS, Apple is pricing its iWork applications (Pages, Numbers, and Keynote) at $9.99 each. Office competitors on Android range from free (like Kingsoft Office) to about $14.99 (QuickOffice Pro and the full version of DocumentesToGo). Microsoft may be able to command a premium for the Microsoft Office name, but it doesn’t seem likely the company would want to price its offerings significantly higher than its competition. Also, on iOS, remember that 30 percent of the purchase price goes directly to Apple. On Android, Microsoft would be handing a similar amount to Google for apps sold via Google Play — but, of course, there’s nothing to prevent Microsoft from opening its own app store for Android.
The real question surrounding versions of Office for iOS or Android is this: Is Microsoft willing to accept that Windows is not the center of most people’s mobile universes — and won’t be anytime soon?
If Microsoft honestly believes Windows Phone — and, in the latter part of the year, Windows 8 — are going to turn the whole mobile industry on its ear and sweep both Android and iOS under the rug in the space of (say) 12 months, then Microsoft would be justified in not extending its Office business to those platforms.
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