Microsoft’s head is in the cloud
Microsoft’s upcoming version of its Office suite sees the software giant trying to stop competitors taking a bigger piece of its largest cash cow, with clever new features and a new subscription model. By Craig Wilson.
It’s been a busy year for Microsoft. The company has taken the wraps off Windows 8, talked up its forthcoming Surface tablet computers, bought enterprise social network Yammer, made updates to its search service Bing and commercially launched its cloud-based Office 365 suite.
Office 2013 takes the best of many of these elements and rolls them into one. Suddenly, Microsoft’s purchase of both Skype and Yammer make much more sense. With video calling and collaboration tools added to the most popular suite of business software suite on earth, the company doesn’t just take the fight to Google, it throws a spanner in the works of companies that make teleconferencing hardware.
Make no mistake: Office is crucial to Microsoft’s ongoing success. It generated more than half the company’s operating income in its last financial year. Moreover, along with Windows, it’s the company’s most ubiquitous product, with an estimated 90% market share in productivity software worldwide.
Thanks to millions of businesses that use Office, cloud-based Google Docs remains an inconvenience for Microsoft at most rather than a serious competitor. But that could change. Google’s Chrome browser has come from nowhere to be far more successful than the far older Internet Explorer.
If Microsoft is to remain dominant, and keep its Office cash cow happily grazing, it needs to dominate the cloud computing space. Clearly, the company knows this. With Office 2013, it’s opted to straddle the real-world/cloud divide: you can still buy the software off the shelf, but you can also get it — along with the other perks of Office 365 — online, for a monthly subscription fee.
Even if you do opt to purchase Office outright, many elements of the suite will encourage you to look at the added features the cloud-based Office 365 version offers. Microsoft has been coy about pricing for both the standalone software and Office 365, but I’d be surprised if it doesn’t try to entice users to opt for the subscription model rather than owning the software outright.
Purchase Office as a standalone and your files created with it can nevertheless automatically be saved to SkyDrive — Microsoft’s online storage service — so that you can use them on other computers or mobile devices while also saving them to your devices. SkyDrive is Microsoft’s Dropbox, and while it’s been in service for some time, this is the first time it’s looked like anything more than a copycat.
SkyDrive, too, is a subscription service, though new users get some free storage at launch. Microsoft wants users to rent rather than buy its services, and this makes sense. If it gets it right, users will keep paying for the convenience. However, if someone can offer something as good — or better — for less or for free, many people may move accordingly. Microsoft has to keep Office compelling.
Office 2013 might also be the product that gives Microsoft’s forthcoming tablet computers a fighting chance against rival devices, especially the iPad. Many users have been clamouring for a proper version of Office for the Apple tablet. There’s definite demand for a tablet version of Office and Microsoft has confirmed that the new version of Office will run on the ARM processors that will power tablets running Windows RT, the company’s all-Metro version of Windows 8 designed for tablets. If you already have a Windows desktop at the office and a Windows laptop in your briefcase, suddenly a Windows tablet looks like a sensible fit, assuming of course it’s as desirable as an iPad.
Microsoft clearly has its head in the cloud. Office 365 could become the only version of Office in years to come.
There are plenty of incentives for going the cloud computing route. Buy a subscription and you get multiple installs, the ability to use Office products remotely from any machine connected to the Internet, 60 minutes’ worth of international Skype calls a month and upgrades to future versions.
There’s another reason Microsoft wants the new version of Office to take off: it won’t run on legacy operating systems like Windows XP. XP remains surprisingly popular and Microsoft is hoping the multi-device syncing capabilities of Office, along with touch and other features, will be enough to encourage users to upgrade, preferably their operating systems, too.
Office 2013 looks like a compelling proposition on paper, and makes many of Microsoft’s other moves look sensible. We’ll have to wait to see what it’s actually like to use on a tablet or online.
There’s one benefit of Office becoming more of a cloud-based product that particularly excites me: the ability to keep your settings — including custom dictionaries — regardless of the device you use. Perhaps, at last, Office won’t constantly revert to US English and will stop putting a red squiggle beneath “colour” in Word. I live in hope. — (c) 2012 NewsCentral Media