In 2006, Google announced its first public release of what later became Google Docs, today known as Google Drive. It’s 2013, and only now does it feel like Microsoft is fighting back*. Microsoft has announced the reinvention of its Office flagship application for consumers, with the debut of Office 365 Home Premium. The service – yes, it’s a subscription-based service – includes support for up to five devices, all the familiar Office applications like Word, Excel, PowerPoint, OneNote, etc., etc. – as well as additional online storage in Sky Drive (20 GB), and 60 free minutes to use on Skype each month.
The suite, which works on Windows tablets, PCs, and Macs, is available for $99.99 annually, which works out to US $8.34 per month. The Office 365 University edition for students, faculty and staff, is a reduced rate of $79.99 per 4-year subscription.
For those who still prefer the one-off “boxed software” license – those, too, will still be available, although surely Microsoft hopes you’ll forget that’s the case. Office Home and Student 2013, Office Home and Business 2013 and Office Professional 2013 are available in their traditional formats, the company says. Office 365 for businesses will be released with new capabilities on Feb. 27th.
On Microsoft’s blog, CEO Steve Ballmer proclaims this release – the first time Microsoft Office has ever been available to consumers as a subscription – as a move to address what’s been a “fundamental shift in our business,” which involves transforming Microsoft from a software maker to a devices and services company.
A shift, huh? Who didn’t see that one coming…like half a decade (or more) ago?
He proclaims that over time, the majority of “the billion plus people using Office” will be using the Office 365 service. That’s optimistic. While Microsoft still remains a powerhouse in the business world, consumers have been switching to lightweight computing and cloud services for years now. Many – especially Microsoft’s future market of millennials and their younger siblings – are more than satisfied with the “good enough” online/mobile software provided by Google (Google Drive) or Apple’s iWork. In fact, Google, not so coincidentally, happened to release an update to its mobile version of Google Drive for iOS yesterday, introducing support for QuickOffice, the Office alternative it acquired to address the needs of those who need the little bit of extra functionality.
Meanwhile, others, not just the younger generation – but anyone who now totes a tablet around as their main device – aren’t necessarily thinking about buying Microsoft Office for it. Because it’s not available. Office for iPad/Android native software doesn’t exist yet, that is. (At least not publicly, though they’re reportedly on the way. But feel free to use a browser). So asking users today to “subscribe” to a service that doesn’t work natively on all their devices, including their Android and iOS-powered alternatives to their Mac and PC, is a risky strategy on Microsoft’s part. That’s more true than ever, given the sluggish early sales of Windows 8.
Microsoft needs to ship Office for everything, and fast, because asking users to subscribe to Office-as-a-service (OaaS?) is a non-starter, when alternatives, from Apple, Google and even new companies like CloudOn, work on these portable devices today.
* No, Office Web Apps doesn’t count. I mean something differentiated and interesting. Since I’ve stirred the pot with this post, I’m going to respond. Here’s why I compared Office to Docs/Drive and iWork, for what it’s worth. Google Drive is available in the browser and on mobile (iOS/Android app) as one product. iWork is desktop software and on mobile (iOS app). Office 365, by its very name, implies comprehensiveness, but it’s desktop software, so to speak. Office Web Apps is considered a separate, more lightweight, product (bringing Office to non-Windows platforms via the browser). Microsoft should have released this version of 365 with native support for other platforms besides desktops/Windows 8 tablets. Hopefully, it will soon correct the situation with Office 365 releases for other platforms. That would then make it a better – and therefore more competitive – product. Web Apps was a catch up to Google Docs, and with this release of 365, Microsoft actually seems to be fighting back with a differentiated product that takes advantage of its offerings (Skype, SkyDrive).