Microsoft and Apple Facing Off Over Office for iOS Subscription Revenues, Not SkyDrive

Microsoft Office is a great product and is universally used and accepted as being far better than Apple alternatives.

However moving it to a subscription based model is a bad idea...there is just no point. Microsoft has been making awful decisions lately...starting with Windows 8 and is only going downhill from there.

walnuts said:

If companies are more than willing to sell their own subscriptions and offer a free app as a gateway, then why should apple get a cut?

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apple doesnt have to get a cut, if you remove all links and tap-thrus to alternative ways to enroll in the commercial service. thats apple's requirement.

see HBO-Go -- HBO's content. apple's store. apple doesnt get paid a portion because you paid for the content to HBO directly, and HBO doesnt solicit enrollment in the app itself.

This is silly of Microsoft. Google already offers all those apps for free with Google Docs. Who would pay a subscription service to MS to use Word, Excel or PowerPoint on their iOS device which is mostly used for pleasure. If people needed to work they can just use Google Docs for free which can open all the MS formats anyway.

Apple is correct in not changing their policy for MS. Why would it? And it's not like people are going to be rushing toward buying an iPad because it has Office. MS has no leverage here.

Now if its Angry Birds we're talking about then I would get that position. Rovio games are free on Android anyway, I never understood why they aren't free on iOS as well. Does Google pay Rovio for distributing their games for free on Android? Or does Apple require Rovio to charge for their games so that Apple gets a cut?

Rocketman said:

The feedback and control loop on this story was so short it was only spaced by one other post to the HOME PAGE. MS is right on top of these rumors and stories. AAPL has not budged. They own a massive ecosystem.

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As does Microsoft. MSFT has been searching for a way to protect the massive revenue they traditionally have generated via Office, and came up with Office 365 as the solution. Extending it to iOS - in their mind - is the perfect solution, but they hate the idea of Apple scooping off 30%.

Personally I'd prefer they just had created apps for iOS, because Office 365 subscription solutions are likely to be painful, less responsive, and poor replacements for the true Office apps. It's going to be a few years before Office 365 is not limping along due to hiccups and bugs largely related to Microsoft learning how to host application solutions.

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Al Muhammed said:

This is silly of Microsoft. Google already offers all those apps for free with Google Docs. Who would pay a subscription service to MS to use Word, Excel or PowerPoint on their iOS device which is mostly used for pleasure. If people needed to work they can just use Google Docs for free which can open all the MS formats anyway.

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Two thoughts:
1. In their defense, Microsoft is thinking ahead, not looking at the current landscape. As time goes on, more and more people will rely on iOS devices for business, and they want a foot int he door now rather than having to make a mad scramble later on.

2. Google just changed their policy with regard to Google Apps for small businesses, eliminating the free option. Apps are now available for businesses only through a subscription model of $5 per month per user.

C'mon Microsoft, just sell the darn apps and forget about the 360 subscription junk. This feels like such a greedy money grab by Microsoft. Sell the MS Office apps and just let us use iCloud.

According to rumours the main issue is that until Microsoft starts to pay the aforementioned 30% - Apple refuses to publish any Office apps, even with purchase links removed (a la Dropbox).

In any case, 30% is a ridiculous amount of money for this as Apple is not going to be delivering any content apart from app download and they are not handling any subscription fees.

As for 'promotion' argument - seriously? Who doesn't know Microsoft Office / Word / Excel / PowerPoint? If anything, it will be Microsoft who will open up Apple's products to new segments of the market.

P.S. One way to sidestep this issue would be for Microsoft to distribute Office apps only to enterprise customers who have local distribution of iOS apps.

what split is ms looking for?

Al Muhammed said:

Google already offers all those apps for free with Google Docs.

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Google Docs are no longer free to businesses and are barely adequate even for easiest documents and spreadsheets.

Futurix said:

According to rumours the main issue is that until Microsoft starts to pay the aforementioned 30% - Apple refuses to publish any Office apps, even with purchase links removed (a la Dropbox).

In any case, 30% is a ridiculous amount of money for this as Apple is not going to be delivering any content apart from app download and they are not handling any subscription fees.

As for 'promotion' argument - seriously? Who doesn't know Microsoft Office / Word / Excel / PowerPoint? If anything, it will be Microsoft who will open up Apple's products to new segments of the market.

P.S. One way to sidestep this issue would be for Microsoft to distribute Office apps only to enterprise customers who have local distribution of iOS apps.

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Apple is delivering the device and user base. That itself is worth 30% easily.

Microsoft's world is shrinking. The desktop is dying. The laptop is dying. The next frontier is tablets and Apple got there first...not Microsoft.

So again, it's not hard to figure out. Microsoft doesn't hold any cards here. Apple has the eco-system and the device segment locked down.

And yes, the devices itself ARE a big deal.

We already have Office for iOS. Both Office 2010 for Windows and Office 2011 for Mac. All you need is a remote desktop app, such as Splashtop. It's a twofer.

mdelvecchio said:

apple doesnt have to get a cut, if you remove all links and tap-thrus to alternative ways to enroll in the commercial service. thats apple's requirement.

see HBO-Go -- HBO's content. apple's device. apple doesnt get paid a portion because you paid for its content to HBO directly, and HBO doesnt solicit enrollment in the app itself.

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I agree! So why force consumers to poke their way to the website on their own if the developers are just going around the app store method to avoid the cost? Clearly apple's disincentive model isn't working..."it just works (except if we aren't getting our cut??)"

LiquidSpikes said:

Microsoft should go to Cydia with it...

And start jailbreaking phones at the microsoft store...

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Yeah, I'm sure the corporate world would welcome jailbreaking with open arms.

Stella said:

Well microsoft, use this to your advantage.

Release Office only for mobile windows and leverage that face: MS office available only on microsoft powered phones and tablets, great for businesses and consumers alike. The best compatibility between your desktop and tablet, at a level iOS cannot achieve.

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I create Word docs on my iPad all the time, who needs MS Word...

WhySoSerious said:

there is no need for MS Office for most people. most people can do just fine with Pages/Numbers/Keynotes.

just like most people can do just fine without rooting their phone/tablet. only the hardcore need Office or Android.

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It's all about branding. So many people say to me "why isn't word on iPad?" And I always respond with "Get Pages, it's similar and a great app made by Apple." And the usual response is "$10!??!??!? That's way to expensive! Stupid Apple."

People woul pay $10 for word because of the familiarity of it from windows.

walnuts said:

Hmmm... I know that a link to a subscription service outside of Apple's subscription is forbidden, but what about simply a line that says "Tap here to subscribe to [whatever the office service is called] OR go online and save 30% off the subscription price!"

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You can't do that.

You CAN do this:
"Tap here to subscribe to [whatever the office service is called] OR go online and subscribe!"

without giving a URL.

Futurix said:

According to rumours the main issue is that until Microsoft starts to pay the aforementioned 30% - Apple refuses to publish any Office apps, even with purchase links removed (a la Dropbox).

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maybe. maybe not. id wager not.

Futurix said:

According to rumours the main issue is that until Microsoft starts to pay the aforementioned 30% - Apple refuses to publish any Office apps, even with purchase links removed (a la Dropbox).

In any case, 30% is a ridiculous amount of money for this as Apple is not going to be delivering any content apart from app download and they are not handling any subscription fees.

As for 'promotion' argument - seriously? Who doesn't know Microsoft Office / Word / Excel / PowerPoint? If anything, it will be Microsoft who will open up Apple's products to new segments of the market.

P.S. One way to sidestep this issue would be for Microsoft to distribute Office apps only to enterprise customers who have local distribution of iOS apps.

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You know why so many stores sell gift cards for different companies now. Becaues they get a huge mark up on them. This no different then Apple charging a fee for subscriptions.

spazzcat said:

I create Word docs on my iPad all the time, who needs MS Word...

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Not at 100% compatibility you can't and good for only fairly simple documents. A mobile MS Office could offer more functionality and more compatibility with the desktop version... but if this works for you then fine, it won't work for everyone.

Al Muhammed said:

Now if its Angry Birds we're talking about then I would get that position. Rovio games are free on Android anyway, I never understood why they aren't free on iOS as well. Does Google pay Rovio for distributing their games for free on Android? Or does Apple require Rovio to charge for their games so that Apple gets a cut?

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I typed in Angry birds and see 4 free versions of Angry Birds...I don't know why, but I keep hearing people say this...its simply not true.

TOYSTER17 said:

NotSureIfSerious

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Probably serious. I'm a college senior majoring in journalism, and I really don't like/need Microsoft Office. The applications take far too long to start up and are filled with bells and whistles I don't need at all or don't use the vast majority of the time.

In fact, I've been a heavy writer since my early days in high school and since then I've used TextEdit almost exclusively and OpenOffice.org when I needed something like a word count.

I really love Power Point, but it doesn't deliver anything I need that I can't get for free from Google Drive.

And Excel is fine for the people who really need it for data entry and stuff, but I find the application very unfriendly to new users like me. And if you're SERIOUS about making a graph for a presentation, you should really be using Adobe software, instead of Excel which can knock out a graph really quick but is incredibly restrictive when it comes to adorning your graph with labels.

Basically, Microsoft Office is good software, but there are many people out there like me who've found perfectly feasible work-arounds that don't require giving more money to Microsoft and still satisfy all of our needs just fine.

Stella said:

Well microsoft, use this to your advantage.

Release Office only for mobile windows and leverage that face: MS office available only on microsoft powered phones and tablets, great for businesses and consumers alike. The best compatibility between your desktop and tablet, at a level iOS cannot achieve.

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LOL. Are they selling that many MS powered phones and tablets? Seems more like they"d be shooting their own foot.

Subsciption based means you need subscribers. Limiting it to one platform which is not dominant brings in less dollars.

This is not 1997, where Apple had to do a deal to ensure Office came to their platform for the foreseeable future as they were on their knees. This time I agree with Apple, if they back down for Microsoft, then all the other big companies such as Google will want a concession.

Microsoft will lose this battle, iOS has decent enough penetration in the business market without having Office. Considering how little MS Windows Mobile is now used in business, I would say Microsoft need them more than Apple need MS.

sinsin07 said:

LOL. Are they selling that many MS powered phones and tablets? Seems more like they"d be shooting their own foot.

Subsciption based means you need subscribers. Limiting it to one platform which is not dominant brings in less dollars.

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If MS Office on a mobile device turns out to be a killer application (especially for businesses ) and gains traction for mobile windows then its in microsoft's favour.

If business adopts windows mobile for whatever reason you can be pretty sure consumers will follow.

Sure, the uptake isn't great at the moment, but that can change in a short space of time... given the right strategy.

haravikk said:

This only highlights how stupid it is to force developers to use in-app subscriptions as a subscription shouldn't just be for the iOS version of an app, and if it isn't then Apple shouldn't be able to get a 30% cut of the non-iOS portion.


Apple's current system is fine for simpler set-ups where an iOS app simply requires a recurring cost to keep using it, but for more complex setups a different system is sorely needed. At the very least the system should only take Apple's cut when the payment is done through an iOS device; if the user decides to renew their subscription online on their Mac instead then that should go via whatever system is in place to enable that.

It's not as if this would cripple Apple's income, as tons of users will prefer the convenience of doing it through their iOS device; and that's exactly what Apple's cut is supposed to be for.

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Yeah, Apple and its HUGE ecosystem of millions of users and uniquely attached devices should be a free platform for advertising what you really want to sell (without paying a commission of course). Yeah.

Um, no.