Why would Microsoft make Office for iPad?
It’s being reported that Microsoft is working on an iPad version of Microsoft Office –
This is hardly surprising, the iPad’s have become a very popular platform. By contrast, Windows Tablets have hardly taken the world by storm. For all the chest-thumping from Redmond about Windows 8 on tablets, Microsoft execs know that it won’t kill the iPad or even make a significant dent in Apple’s market share.
So it makes sense that Microsoft would consider an Office version for the iPad. If they don’t there’s the risk of a rival producing a competitive office suite, first for the iPad and later for Windows or online.
The last thing Microsoft wants is mainstream customers, retail and organizations, thinking of something other than Office as a viable alternative.
On the other hand, a full-fledged version of Office working on a Windows Tablet might be enough to draw customers away from the iPad, especially the valuable corporate customers.
Microsoft has form in this area. Whenever a rival to Microsoft Office looks like gaining acceptance, Redmond moves to prevent mass exodus. They do this even if it means reducing the revenue gained from some customers.
In the long run it’s better for Microsoft to keep customers using Office for a lower price than have them defect entirely.
When OpenOffice was gaining interest, Microsoft started dropping the retail price of Office so customers would decide to buy rather than an unknown ‘free’ alternative.
Google Apps (the browser based office suite) was and is a bigger threat given Google’s brand name and huge resources. Microsoft moved to provide a similar service, Office Web Applications. OWA provided an ‘MS Office like’ experience so there was less difficulty in using it rather than learning the details of Google Apps. In addition, Microsoft provides ‘Office on the Web’ free to individuals and also as an extra for organizations to have on their own servers. This means Microsoft undercuts Google Apps appeal to both small and large customers.
Computer makers like to provide Microsoft Office on new computers but in recent years the time-limited ‘trial versions’ weren’t sufficient with fully installed versions of OpenOffice looking more appealing. Office 2010 now has a ‘Starter Edition’ available for computer makers to keep them installing Microsoft Office in some form.
Various software hackers have made ‘portable’ versions of Office which (in theory) can be run from a USB memory stick without fully installing on a computer. Microsoft now provides (though hardly promotes) that feature in the Office 2010 Starter Edition.
This policy is also good for customers. Despite Redmond’s talk, many of the major innovations and price reductions in Office have come from the effort to stop rivals, not any altruistic motives by Microsoft. Does anyone really believe that Office Web Applications would have been developed if not for Google Apps?
On the downside is Apple’s 30% cut on every App Store sale. Doubtless Microsoft can get a better deal than that but it’s still a hefty slice from already slim pickings of $10-ish per app.
More likely is something that bypasses the App Store. Maybe some kind of HTML5 version of Office that can be installed and run via the browser but operate offline? That would be an impressive technical feat, even for a stripped down version of Word, Excel and PowerPoint, but once done could be more easily ported to other platforms as necessary, such Android.
Pricing
An Office version for iPad would presumably be priced around the same as Apple’s iWork apps; Pages, Numbers and Keynote are $10 each. So a basis for pricing “Word for iPad” would be $10.
Anything that’s even close to standard retail Office prices ($100 or more for combined Word, Excel and PowerPoint for iPad) would be laughable.
But don’t underestimate Microsoft’s savvy. The company is very good at structuring pricing and license rules to maintain the higher prices for volume customers and higher value bundles while making some form of Microsoft Office available to others for lower price points.
For example, the Office ‘Home and Student’ bundles are much cheaper than other versions of Office. However the licensing quantity (3 computers), rules (one household) and few apps (crucially excluding Outlook) makes comparison with other MS Office bundles deliberately obscure.
While Office for iPad will certainly cost less than Office for Windows, it’s likely to be structured in ways to make ‘side-by-side’ comparisons difficult.
For technical as well as marketing reasons, Office for iPad will be a limited set of Office features. Most likely it will be similar to the features in Office Web Applications.
It may only be available as an extra for some higher priced Office product, for example an Office 365 subscription. This would be another way to bypass the 30% grab by Apple.
Microsoft will be looking at the revenue from an iPad version of Office, but more importantly they’ll be considering the effect on sales and profits across the Office suite. Like Office Web Applications, Office for iPad could be considered a ‘loss leader’ – not profitable in itself but worth the loss in order to maintain the overwhelming MS Office market share.
What about Android?
Microsoft has connections with Apple going back a long time and sees Google as more of a rival and threat than Apple.
If Android tablets gain a larger market share (as they have with smartphones) then Microsoft will have to look at an ‘Office for Android’ offering too. Most likely there are a few Microsofties working on such a contingency already. Possibly the same team working on the iPad version of Office have an eye on a similar release for Android (which is why the HTML5 approach would be so handy).
As with the Apple iPad, Microsoft will resist making an Office version for Android unless and until the hardware gets enough market share to make it necessary for Microsoft to protect the Office suite.
However it’s all speculation about Office for iPad or Android tablets. This story might have a firm basis or none or be some ‘trial balloon’ by Microsoft to gauge the response.
Microsoft is hoping that Windows 8 with ARM CPU based tablets and a properly working tablet interface for Office will help lure customers back from the iPad and rivals. Anything they do to make Office for iPad or Android will be a reluctant second-choice at best.
