Office continues to rake in cash for Microsoft
Microsoft has released Office sales statistics as part of their latest financial disclosure with Office 365 having over 3.5 million subscribers.
3.5 million subscribers is up from 1 million in May 2013 and 2 million in October 2013.
More than 15% of total consumer sales of Microsoft Office were for Office 365 subscriptions during the quarter ended 31 Dec. 2013.
The familiar ‘one-time payment’ consumer sales of Office dropped by 24% with Microsoft estimating (by undisclosed method) that 16% of that drop is due to the shift of sales to Office 365 subscriptions. The company boasts that “Excluding this impact, traditional consumer Office outperformed the underlying consumer PC market.“. Sales of consumer PC’s continue to drop in what their CFO politely called ‘headwinds’.
Commercial Office product sales grew 10% during the quarter with sales of Lync jumping 25%. Lync is Microsoft’s corporate video and instant messaging product (the commercial equivalent of Skype, if you like).
The rise in sales of Office 365 subscriptions is to be expected. Microsoft is pushing the subscription option very hard and making purchase of the traditional ‘one off payment’ Office licence harder to find. While Microsoft says that subscriptions are popular, it may be more accurate to say that many less-savvy consumers are ‘buying’ Office 2013 not realizing the full consequences of their purchase.
“3.5 million subscribers” sounds like a lot but is it really?
The company usually discloses sales dollar values for Office, not quantity of licenses sold. That makes it hard to compare selling 1.5 million Office 365 subscriptions in three months with sales of traditional Office that are only disclosed in dollar sales. It will be interesting to look for the future financial disclosure where Microsoft stops giving hard numbers for Office 365 subscribers and reverts to comparisons (e.g. 13% increase) or dollar sales (e.g. $213 million).
Only two years ago Microsoft boasted that they were selling “a copy of Office every second” so that’s just under 8 million licenses (presumably consumer and commercial) a quarter.
In the middle of 2010 Microsoft was touting the improbable figure of 1 billion Office users and was still dragging out the same nonsense in 2012. Even the revised boast of 750 million users seems to be stretching credulity (sorry, they are ‘extrapolations’). Neither boast is an audited figure and isn’t in any formal financial disclosure.
