Bloomberg News
Chief Executive Officer Satya Nadella unveiled Office software for Apple Inc.'s iPad, laying out how he plans to more aggressively push the company's programs onto rival platforms after Windows for mobile devices failed to catch on.
In Nadella's first public speech since he took the CEO job last month, he said Microsoft's 'innovation agenda' is geared toward a 'mobile first and cloud first' world, before the company debuted Office for iPad. The software includes the popular productivity programs Word, Excel and PowerPoint.
'This is our first step on the journey of making this great innovation vector for all of Microsoft,' Nadella said at a company event in San Francisco.
Nadella, who took over as CEO from Steve Ballmer, is presiding over Microsoft's shift to a more open approach, where it sells applications and services for its own operating systems as well as those of rivals. With 's iOS and Google Inc.'s Android dominating in mobile, Microsoft risks having Office locked out of most handheld devices if it can't sell the productivity software for those platforms.
'They were leaving out a pretty sizable part of the market by not offering your products on Android and iOS,' said Sid Parakh, an analyst at McAdams Wright Ragen in Seattle, who rates the shares hold. 'By not offering your products they were enabling new competitors.'
Business Model
Office on iPad also heralds a new business model for the software, which has been a paid product and will now have some features available for free. Users can opt to get an enhanced version with the purchase of a $99 Office 365 subscription.
Last year, the Redmond, Washington-based company released paid versions of Office apps for the iPhone, which required a subscription to Office 365. That product cost $99.99 a year for a home version that works on five devices and $69.99 for a version that works for just one computer and one tablet.
On his first day as CEO, Nadella emphasized Microsoft's focus on devices and Web-based cloud services and said those priorities would 'define Microsoft going forward.'
'Microsoft is in the process of migrating the lion's share of its business to the cloud and subscription,' Mark Moerdler, an analyst at Sanford C. Bernstein & Co., wrote in a note to clients last week. Nadella will explain his view of Ballmer's devices and services strategy to mean a focus on enabling devices, including iPads, iPhones and products running Google's Android, Moerdler said.
The iPad version of Office, a suite of software that includes Microsoft's Word, Excel, Outlook and other programs, may add $1.1 billion to $1.5 billion in consumer Office subscription a year, Moerdler said.
Mobile Productivity
Consumers are spending more than twice as much time using mobile productivity apps than they did a year ago, according to research measuring usage between January and March by Flurry, a mobile analytics firm which tracked usage on both phones and tablets.
'Microsoft's announcement of Office for iPad couldn't be more timely,' the company said in a blog post. 'In fact, it can define Microsoft and its newly appointed CEO's tenure in the post-PC world.' The study included phones and tablets with both iOS and Android. 'This growth rate eclipsed all other categories including Messaging, Games and News.'
To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net
To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Jillian Ward
Posted by Unknown on Thursday, March 27, 2014 - Rating: 4.5
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