At the press event on Thursday Satya Nadella made his first appearance in public at the CEO of Microsoft and said that Microsoft Office was making its way onto the Apple iPad. Of course owners of the iPad all agree that this isn’t before time as many use Microsoft Office on their computer at work and home.
However it was what went left unspoken that was more important. By bringing Microsoft Office to the iPad, Microsoft has admitted defeat in the tablet market along with confirming what people had thought about Nadella steering Microsoft from consumer devices.
Before he became the CEO he had worked with the cloud and enterprise division of Microsoft to bring cloud services to Microsoft Office. After taking over from Steve Ballmer some people had said that he would unify the multiple products of Microsoft, which would mean an end to non-essential branches, including the Surface line of tablets, the Bing search engine and Xbox video game consoles. The investors of Microsoft urged the CEO to drop the Surface tablet.
Office has been one of the biggest selling points of the Surface tablets and Microsoft has now handed over the greatest advantage the Surface had over the Apple iPad. They have done away with the advantage while at the same time having improved the value of the Apple iPad, which has been the biggest competitor for the Surface.
“The availability of Office on the widely preferred tablet platform allows to make the Office environment of the knowledge worker follow its user, regardless of the device,” Robert Breza, a Microsoft analyst for Sterne Agree, told International Business Times. “The launch will bolster application support and could mark a step away from the consumer [hardware] business.”
Microsoft has been struggling with the Surface and this saw them drop down the price in July by $150 and when people gave up their iPads in September, they got a $200 gift card. In the fourth quarter earnings they said they lost $900 million in sales from the Surface.
If Nadella gets Microsoft out of the way of Apple, they will be able to continue to improve the suite of productivity apps, therefore creating an experience that is seamless on devices and platforms.
But what remains to be seen is whether it will work for them. There are several suites in competition and these are found on the iPad.
The investors of Microsoft have responded well and the stock is up by over one share. Analysts have said that it may offer a boost over the short term.
“Despite the resulting drag on Surface sales, we believe the launch is a short-term net positive for MSFT, as the [app] will likely be a top seller, boosting Office awareness and licensing revenue by about $600 million a quarter,” Breza said.
