Microsoft brings Office to Apple's iPad
With the long-anticipated unveiling, Microsoft makes a bet that it can appeal to users of Apple's popular tablet computer.
Microsoft made it official on Thursday: Office is coming to Apple's iPad.
The long-expected announcement is a calculated risk that Microsoft's support of a major rival's competing tablet will work to its advantage. The hope is that enough iPad users will forgo free alternatives such as Google Docs and Apple's iWorks software, and so compensate for potentially lost sales of its own Windows-based Surface tablets.
"It's a beautiful set of applications," said new Microsoft CEO Satya Nadella.
Meet Office for iPad
For some, it represents a moment where the new Microsoft bids goodbye to the old Microsoft. When Steve Ballmer was in charge, Microsoft hewed closely to a Windows-centric view of the world in which the fate of its operating system dominated the company's decision-making process.
By making Office available on the iPad, Nadella is making a bet that Microsoft can win back some of the users who make up Microsoft's natural constituency -- business professionals -- who now run competing productivity applications on Apple's popular tablet. The question now is how many of those same former PC users, who have become accustomed to iPads, it can win back.
Under Microsoft's "freemium" approach, the applications are free to download, so a user can view a document or presentation without needing a paid subscription. However, Microsoft does require a subscription to Office 365 before you'll be able to edit or create a document. The iPad apps -- Word, Excel, PowerPoint, and OneNote -- are available for download from the App Store for no charge.
Still, a big selling job awaits. In a revealing Twitter interchange with other Silicon Valley venture capitalists recently, Khosla Ventures' Keith Rabois wrote "Google Documents and Quip are superior for documents, Keynote is superior and Excel is over-rated."
Nadella is aware that Microsoft faces skepticism but even though many iPad users already use inexpensive products that offer features similar to Office, a product from Microsoft would be expected to provide better compatibility with Office on PCs than any third party can provide.
"The real goal for us is to set up to provide the apps and services that empower every user across all of these devices and experiences," said Nadella, who replaced Ballmer on February 4. "That's perhaps the job number one that we do: To empower people to be productive."
The software had been a long time coming, but Microsoft had its reasons.
"It's not a trivial port," Nadella told CNET after his prepared remarks. "One of the things we wanted was to do this with particular care and focus. I still think it's in the early days. I understand that anything can be done quickly but we wanted to do it right."
We're also talking about a cash cow. In Microsoft's last fiscal year ended in June 2013, the Office-dominated business division accounted for more than $16 billion of Microsoft's nearly $27 billion in operating profits. If Microsoft extends Office to iPads and Android tablets, as expected, it potentially sacrifices some sales of its own Windows-based tablets. That may be worth the risk if enough iPad users dump free alternatives to Office, such as Google Docs and Apple's free iWorks software, and decide to sign up for Office subscriptions
"We're an innovative company but we're coming from behind in some categories," he added, "and if you look at the story of Windows, we lead in some and we have fallen behind in some. And we're grounded in that reality. So that means what we need to be is a challenger and be able to show what we are capable of doing."
For its part, Apple is "excited" that the software is coming to its ecosystem. "We're excited that Office is coming to iPad," Apple spokesperson Trudy Muller told CNET in an email. Still, she mentioned that it's a new addition to many existing productivity apps already available for the tablet, like iWork, Evernote, and Paper by FiftyThree.
For years, investors expressed dissatisfaction with Ballmer's refusal to adapt Office to run on newer, faster-growing computing platforms from Apple and Google. At Microsoft's September analyst meeting, Ballmer mentioned a version of Office that would run on tablets powered by Google's Android operating system, but he didn't provide specifics. But now that he's calling the shots, Nadella, who formerly ran Microsoft's cloud services division, is free to push harder for a serious cross-platform strategy as the world's largest software maker retools itself into a mobile-first/cloud-first company.
Updated, 5:31 p.m. PT: Adds statement from Apple.