The next step of Microsoft’s aggressive mobile strategy: Free Office for iOS, Android tablets

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Analysis Late last week Microsoft announced it was making more of its Office 365 software free for users on iPads, iPhones and Android tablets, enabling users to edit documents on their mobile devices without the need of an Office subscription. It’s the biggest indicator yet of how serious CEO Satya Nadella is on the company’s mobile first, cloud first future.

For anyone who still has sharp memories of the Ballmer and Jobs years, this is a surprising move – but it’s worth knowing Redmond hasn’t completely lost that touch. The apps being created for non-subscribed Office users aren’t equipped with all features, so there is still an incentive to subscribe somewhere.

Yet, like Microsoft’s deal with Dropbox announced last week, it’s more about ensuring greater collaboration and productivity. It’s about realising a company’s strengths and weaknesses, partnering with the right companies if needs be, and accepting that in certain fields, such as smartphones, it’s a battle that Microsoft just isn’t going to win.

One of the first jobs Nadella undertook as Microsoft chief exec was to make sure Office 365 was available on iDevices. At that point users could only view documents and not edit, but it was still a key move.

As the demos rumbled on, it became clear that this wasn’t a half-cocked job just shoving Office onto an unfriendly OS without any considerations for UX. These were nicely designed, bespoke applications. Microsoft is serious about this.

“Anytime someone has an idea or an inspiration, we want to empower them to take action,” said John Case, corporate vice president for Office at Microsoft. “With over a billion Office customers worldwide, and over 40 million downloads on the iPad, it’s clear that Office applications are what people want to use to get things done.”

This is another intriguing factor. There’s a market for mobile collaboration and productivity apps, but is part of that because of how late Microsoft has been in opening up Office on mobile?

Analysts are looking at this change differently. Jan Dawson, formerly of Ovum and now at Jackdaw Research, argues it would be unreasonable for Microsoft to charge on the basic stuff Office provides.

“Think about the kind of Office-related work you might want to do on an iPad,” he writes on his blog. “It likely isn’t writing the next great American novel, preparing the slides for your TED talk or working with pivot tables in Excel. It’s fixing a typo in a Word document, updating a cell in an Excel spreadsheet or inserting an extra slide in PowerPoint.

“Is that functionality worth $70-$100 a year for most users?” he added.

There’s another issue at play here too. Microsoft’s consumer Office revenue is significantly less than its business revenue. No surprises there, but is Microsoft taking a hit on consumer Office bottom line to ensure it remains the leader in business? In the long run it may work, argues Dawson.

“At some point, Microsoft may decide that allowing consumers (whether acting in their personal lives or as employees) to use at least some functionality for free on some devices is a price worth paying to cement the position of Office as the productivity tool of choice for businesses, who pay most of the bills,” he wrote.

The key words here are ‘whether acting in their personal lives or as employees.’ It’s good news for CIOs. The consumerisation of IT may mean there’s a blurring of lines on this front.

This is a view backed up by Nicholas McQuire, enterprise mobility analyst at CCS Insight.

“Microsoft is getting aggressive under Nadella’s ‘cloud first, mobile first’ strategy, and these free services show the rigorous efforts being taken to shift the company from a license-based to a subscription-based business,” he said. “Microsoft needs to ensure its services have relevance with consumers, and whilst it has healthy adoption of Office for iOS so far, it has struggled to grow Office 365 subscriptions, especially with consumers.”

“Much is at stake in the future on whether the growing number of free services around Office becomes the on-ramp to paying Office 365 subscriptions it hopes for,” he added.

You can read more about the latest Office updates here.

 

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