Microsoft Can Do a Lot with the Next Office
Harsh is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Microsoft (NASDAQ: MSFT) CEO Steve Ballmer has earned a lot of ire in his time at the helm of the software giant. This is not surprising given that the stock price has almost halved in his reign and we have witnessed some bad business sense as far as acquisitions are concerned ($8.5 billion for Skype is plain foolish according to me). Earlier this month, Microsoft took investors’ fury to the next level after it said that it’s writing down $6.2 billion related to its aQuantive acquisition, for which it had paid an 85% premium five years back.
But now, it’s time to give Mr. Softy some much needed pat on the back. Although you might feel absurd at first, the latest product launch which Mr. Ballmer has overseen seems promising.
The new Office
On Monday, Microsoft unveiled the customer preview of its latest and greatest iteration of Microsoft Office, packaged with a number of novel features. For starters, the next version of MS Office is Windows 8 ready, works smoothly on touch-based platforms, and is built for the cloud. Your documents are automatically saved to the SkyDrive and you might store them locally as well. We also see Microsoft’s latest acquisitions, Yammer and Skype thrown in.
I can go on discussing what features the latest Office provides, I’ll focus on what this complete revamp of Microsoft’s cult offering means for the company. Clearly, the next version of the Office tells us that the company is greatly focused on pushing the acceptability of its Windows 8 platform and Windows tablets.
The mobile focus
According to Ballmer, the newest Office is the most ambitious version of the application yet, and it is indeed groundbreaking. It has been optimized for use on touchscreen devices, and works pretty well as seen during the presentation. This is certainly a smart move on Microsoft’s part. Office is one of its most profitable businesses and constituted nearly three-fifths of Microsoft’s operating profit last quarter.
With the latest version of Microsoft’s Office getting touch and cloud capabilities, it will undoubtedly intertwine pretty well with Windows tablets. Although one can’t just count on Office alone to drive sales of Windows tablets, but they would probably play their part in an effort to make them successful. After all, Office is a very important tool for professionals and those who can’t absolutely live without it will probably opt for Windows tablets. With its touch integration and a host of other features, the new Office might prove to be a strong driver for adoption of Windows tablets.
A potential market
Also, the latest Office might help Microsoft capture some market from Google (NASDAQ: GOOG) and establish its supremacy in tablet productivity apps, if Microsoft chooses to do so. Google recently acquired Quickoffice, which enables users to open and edit Word, Excel and PowerPoint files. It is one of the most downloaded productivity apps on iOS and Android platforms.
Now Microsoft’s Office is obviously better than the Quickoffice app, but it isn’t available to Apple (NASDAQ: AAPL) iPad users. The iPad is the best selling tablet out there and it would make sense for Microsoft to release its Office on the platform. There were rumors in February that Microsoft would be launching the Office on the iPad and was about to submit its app for review to Apple but nothing came out.
Mr. Softy is most probably in a dilemma over here since it’s about to launch its own tablets and the Office suite would be a strong selling point. Giving that away on Apple’s app store will wipe off some advantage against Apple’s tablet, but it is surely one option that Microsoft can consider in the long-term since it can make more money this way.
The latest Office from Microsoft seems like an all-rounder. It can work across a range of devices, especially tablets, and has the potential to make some big money for Microsoft and assist in the adoption of Windows-based tablets. Again, there’s the possibility of Office being released on other tablet platforms. How the software giant will go about the Office on Android and iOS platforms is still now known, but if it chooses to release some sort of Office app for them, they would probably do great business.
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