San Francisco: Microsoft has released an iPad version of its popular Office software suite, a breakthrough heralding a new era under a CEO who promises to focus more on the devices that people are using instead of trying to protect the company's lucrative Windows franchise.
Microsoft's decision to relent to persistent demands to make its top-selling software application available on the world's most popular tablet comes seven weeks after the Redmond, Washington, company anointed Sayta Nadella as its CEO after being led for 13 years by Steve Ballmer.
The change in command gives Microsoft Corp. an opportunity to prove it's a more nimble company adapting to evolution of computing instead of clinging to its old ways. Nadella, who has been working at Microsoft for 22 years, emphasized that he felt rejuvenated since taking over as CEO.
‘The Office app for the iPad represents a major step in the right direction for Microsoft,’ said Daniel Ives, analyst of FBR Capital Markets. "They finally looked in the mirror and realized they needed to go with the crowd in terms of iPads," added further.
The availability of an Office app also could encourage more people to buy an iPad. Gartner Inc. expects 271 million tablets to be soldin 2014. ‘This might also include those running on Windows and Android, versus a total of 277 million desktop and laptop computer. By the end of 2015, tablets should be outselling PCs by a wide margin,’ highlighted Gartner.
Nearly 200 million iPads had been sold through the end of 2013, from which about 5 per cent of the device owners would have to pay for a $100 annual subscription in order to generate an additional $1 billion in revenue.
The Office 365 subscriptions cost $70 or $100 annually, with the lower price placing more restrictions on the number and types of devices that can be used. The Office 365 subscriptions also have been required to use Office apps built for the iPhone and Android phones last summer, so many iPad owners many already have one.
Like several other analysts, Ives thinks the Office app for the iPad could generate an additional $1 billion in revenue for Microsoft. Although the Office app is free to anyone who wants to read Office's Word, Excel and PowerPoint programs on the iPad, it will require a subscription to Microsoft's Office 365 to create and edit documents on the device.
Microsoft hasn't mentioned how many Office 365 subscribers it already has, but Rick Sherlund, Nomura analyst estimates the number of subscribers could be 14 million to 24 million. He estimates that the annual subscription revenue is running at about $2.5 billion.
"We are taking great focus and great care that Office on every device shines through," concluded Nadella.
