Finally, Microsoft is opening itself up to the real world — and to some free love.
Almost four years to the day after the release of the first iPad, Microsoft deigned to put out a version of its flagship software package, the Office productivity suite, for the Apple tablet. The company had previously hoarded Office for its own Windows-based tablet system, a conservative approach designed to protect the operating system that Microsoft has long considered its crown jewel.
Putting out Office for iPad is a clear sign that Microsoft is finally liberating itself from long-held dogma and embracing new ideas. That change in strategy means Microsoft customers will finally be able to choose freely among hardware platforms, that Office users will be able to share data more readily between home and office, and that iPad owners can tap an even wider and more powerful collection of apps. Microsoft, meanwhile, finally has a fighting chance in the battle for the future of computing.
Until now, Microsoft has guarded Windows like a treasure hoard — a conservatism that put Microsoft’s other businesses at a disadvantage in emerging sectors where Windows does not dominate.
“Microsoft under [CEOs Bill] Gates and [Steve] Ballmer was always famous for the ‘strategy tax’ — handicapping Office if necessary to promote Windows, and even handicapping Internet Explorer’s editing capabilities to promote Office,” says Joel Spolsky, a New York software entrepreneur who designed the macro language for Excel before leaving Microsoft in the late 1990s. “This sounds like the Office team is finally being allowed to compete on all platforms instead of paying the strategy tax to bolster Windows sales.”
Deciding what to do with the long-rumored Office for iPad was Nadella’s first test, one that addressees the questions everyone asked when he was appointed: What changes would he be willing to make? How much would he sacrifice short-term goals for long-term relevance? Microsoft has never been good at sacrificing the former for the latter. But Nadella has shown signs of willingness in his career.
He made Microsoft’s cloud division an unexpected success; no one expected the buttoned-down company to thrive in the world of online service platforms, where open standards and interoperability are everything. But Nadella learned to work closely with rival companies including, reportedly, Apple, which is said to run much of its iCloud service on Microsoft’s Azure platform. Meanwhile, the hippie internet ideals of interop and openness seem to have stuck with the executive in his new job overseeing all of Microsoft.
This new mode of thinking was apparent in Microsoft’s reported move away from Windows licensing fees. A spate of news accounts have Microsoft planning to discount and in many cases give away for free copies of Windows. The idea is that Microsoft can make up the lost revenue selling services like online storage and software rental. It seems that revenue from Windows, once jealously guarded, will now be sacrificed.
If these moves seem like they’re part of a grand plan toward inclusiveness, that’s because such a plan exists — at least when it comes to Office.
“Our commitment going forward is to make sure we drive Office 365 everywhere — across the web, across all phones, across all tablets,” CEO Nadella said at the launch event for iPad Office. “We’re taking great focus and great care to make sure Office on every device shines through.”
A Return to Roots
Microsoft’s new strategy echoes Google’s strategy of using its operating systems, Android and Chrome OS, as loss leaders for sales of advertising and online apps.
But this is also a return to Microsoft’s roots. Back before it came to dominate the personal computer industry in the mid 1990s, Microsoft was an early and zealous adopter of systems that competed with its own operating systems, including Apple’s Macintosh. Indeed, graphical versions of Microsoft Word and Microsoft Excel debuted on the Mac years before they were available on Windows.
Dominating the desktop seemed to make Microsoft more conservative, and the company was slow to convert its software to the web, despite the rise of web-based productivity software like Google Apps, and was also slow to embrace mobile devices, holding back Office for its own laggard tablet system, which launched in 2012, years after the iPad won the market.
Now Microsoft finds itself backed into a corner. By trying to use its apps to protect its operating system, it destroyed the relevance of both. In the world of mobile devices — a category that already overshadows PCs — Microsoft’s selling virtually no operating systems even as Office has been withheld from the only app markets that matter, those run by Apple and Google. Officially speaking, Microsoft claims it held back Office for iPad not for strategic reasons but to make it work better, to integrate better with Microsoft’s developer interfaces and web services.
In the end, it might not matter why Microsoft is late to the iOS party. With iOS apps like Evernote, Mailbox, and Keynote occupying niches that used to belong to Word, Outlook, and PowerPoint, the question is whether these moves come too late to shift woeful trends in mobile.
“The world has changed,” Spolsky says. “Word and Excel are no longer the killer applications that people need to buy a computer. Honestly there’s very little word processing going on on tablets.”