Microsoft Paying Apple 30-Percent Cut on In-App Office 365 Subscription Purchases

[stewend]

Office features

The whole sub thing is being overblown. Office Suites have been migrating to the cloud for a while now. Cloud penetration is low but according to Gartner, 60% of Office Suites are expected to be cloud based by 2022.

So you've got the following market forces setting up subs to be the primary monetization model for the Office Suite market:
1 - software is moving to the cloud which monetizes differently since it uses a service model
2 - consumers now own multiple computing devices (PC, phone, tablet, etc) so the whole one $200-400 license for one install on one device is no longer cost effective for many people

Far as I can tell, MS is just positioning itself here for the future.

There's some give and take so if you only own one device and all you need is Word, you probably won't like the sub. But if you have multiple devices, it's a deal. If you need Access or Publisher, it's a deal (that suite used to be $400). If you were planning to purchase cloud space, it's a deal (20G on iCloud = $40, 365 gives you that for free).

I'm also interested in knowing what people who advocate iWork over Office do for a living. I'm an engineer at a company of 10,000 and dumping Office for iWork would immediately stop most of our processes, make it a pain in the ass to share information with contractors and outside parties, and pretty much ensure a net loss in revenue for a period of time that'll last who knows how long. Office is so critical to workflow the company pays for training to teach employees how to use advanced features like VBA. Meanwhile if that last iWork update and FCX shows anything, it's that Apple's software strategy looks to be focused on stripping features to cater to technology illiterate grandmas at the expense of organizations.

There is a philosophical divide between those who welcome sub based software and those who want to "own" their product. It is true that you never really own any software legally but it sure feels like you do when YOU install it and YOU decide when to upgrade it or stop using it. I agree that excel in it's full form is the best spreadsheet program par none. I regularly use pivot tables and other features that are lost in many others and could not do without it in the office. We should be wary however when the owner of such a dominant program gets too close to being in a monopolistic position of telling you when your software will stop working or when it needs to be upgraded and how much it will cost. I welcome other less full featured programs especially one's that share the same file format with the more full featured programs. There are more people out there beside "technology illiterate grandmas" who have a need for less full featured programs at a reasonable cost which can be shared across platforms. Microsoft has also neglected apple customers over the years. It was not too long ago that excel was so different on the mac that I could not do many things. Microsoft has been stubborn but has now finally decided to embrace the Apple community by offering a version of office for iPad. For that I commend them. Unfortunately it took a doubling of apple market share over the years plus the recent failure of Microsoft to provide a reasonable tablet to compete with the iPad to get attention. As far as being a nimble innovative company Microsoft is not. I hope that will change going forward because they do make some very good products.

 

[Renzatic]

There is a philosophical divide between those who welcome sub based software and those who want to "own" their product. It is true that you never really own any software legally but it sure feels like you do when YOU install it and YOU decide when to upgrade it or stop using it.

That is true, and my biggest exception to SAAS is directly due to that. I like the thought of having something I can install and use at any time free of charge beyond the initial cost does feel more appealing than the alternative.

But I do see the advantages of subscription services. One of the biggest of which is that it lowers the cost of entry for higher end applications. Photoshop CS6 costs about $400 to buy it off the shelf. That's prohibitively expensive for most people, especially for hobbyists and students who want to learn it. But $20 a month? That's an entirely different story. Just about anyone can afford that. With the sub service, you're no longer torn between having to plop down a healthy chunk of change or piracy to use PS.

The downside is that you will end up spending more after two years of use unless you're a regular upgrader, and you don't have anything you can sell second hand to recoup some of your initial cost if you end up no longer needing it. But even with those caveats, there are some good perks to subscription services.

 

[Lionel Messi]

I use Word once a month while Pages is running almost 24/7. For all those simple tasks, Numbers does the job but I gotta admit that Excel excels in all the other tasks. I use Keynote all the time as soon as they introduced iCloud for iWork as it was literally impossible to open a Keynote doc on Powerpoint without something going wrong, but now it's far more easier and simpler than ever.

Pages, Keynote and Excel. That's what a great figure like me uses.

 

[Frozzie]

I'm happy with subscription. Even if you end up paying more in the longer term, it doesn't necessary mean the product that you use won't be updated will it? Surely the products will get yearly feature updates and in the end all means the same...

And if it can reduce piracy, it's also another good thing.

 

[campyguy]

Different type of Amazon route.

What I meant was they could've nixed in-app purchases altogether. Forcing people to their own site to get a subscription, and cutting Apple out of the loop entirely in the process.

I understand, but your point here is moot IMO. A discount is a discount, regardless of where it comes from. MS offers a 33% discount through Amazon, but not anywhere else - who cares? MS sees the same price in their bottom line - they care, and Amazon is seeing a cut I'm pretty sure. I wasn't taking you to task, or anyone else here on this forum.

I'm wondering why the iOS consumer doesn't see a similar discount opportunity reflected in the IAP - that's my point. MS is offering a discount to directly to the consumer via Amazon, so why not through the iTS? Or, at all.

I got a free year of O365 by visiting an MS Store, and I'll buy a year or two of O365 via Amazon - and I'll sell my 2-license version of Office 2011 Pro for maybe $100. I'll essentially get 3 years of upgrades for no cost to me.

 

[LaskoVortex]

really ironic to read that from an apple customer.

Haha! Nice try. I'd probably be an apple customer, but what's to buy?

https://buyersguide.macrumors.com//

 

[Serelus]

You addressed a point, but it wasn't even remotely in response to the one I made, so you have no right to the insult. Read again, try again.

I am sorry, it might have been a rather intense response, but your assertions are simply incorrect, I can tell you right now that the excel spreadsheets I work with, will not work in numbers for lack of support. Of course they are going to work if you you don't do much more than data-entry.

Furthermore, your statements are based upon nothing but your own experience.
From what I can tell, that doesn't represent all Excel and Word users, therefore no one is brainwashed, and Excel and Word are in fact the best tools to utilize these file formats.

 

[IJ Reilly]

I am sorry, it might have been a rather intense response, but your assertions are simply incorrect, I can tell you right now that the excel spreadsheets I work with, will not work in numbers for lack of support. Of course they are going to work if you you don't do much more than data-entry.

Furthermore, your statements are based upon nothing but your own experience.
From what I can tell, that doesn't represent all Excel and Word users, therefore no one is brainwashed, and Excel and Word are in fact the best tools to utilize these file formats.

My assertions are correct, you are simply ignoring my assertions in favor of assertions of your own that suit your response.

I do not for a moment believe, nor have I said or implied, that real spreadsheet jocks don't have a perfect justification for using Excel. What I am saying (again) is that the vast majority of spreadsheet users aren't spreadsheet jocks, not by a long shot. I receive .xls files on a regular basis and have done for decades, but I cannot remember one instance where any included even a single calculation. They are simple tables, and not very large tables at that. Not only does this task not require Excel, it doesn't even require a spreadsheet. Know it or not, Excel is being used as a glorified table maker by all but a small fraction of users within the huge installed base. My sense is the real power users are in the low single digits.

Word is a similar issue. Once again, I've been dealing with Word documents for decades. The vast majority are almost entirely unformatted. Very, very few Word users seem to know how to use paragraph and character styles. Consequently, every single paragraph is set to the default "normal" style, with fonts, indents, tabs, line spacing, page breaks, all hand-set. A lot of the time even the tabs aren't set properly and indents are done with the spacebar. So why are only a tiny fraction of Word users capable of using it for even the most basic word processing tasks? I spend an awful lot of my time cleaning up the messes other people make with Word, so I know from experience how poorly it is being used. To claim that people who create these totally clueless Word documents must use Word instead of something else for the sake of "compatibility" is to miss the entire point of using these tools. The brainwashing is the received wisdom that everyone must use the "standards" or something terrible might happen.

Experience matters. I happen to have a lot of it.

 

[Serelus]

My assertions are correct, you are simply ignoring my assertions in favor of assertions of your own that suit your response.

I do not for a moment believe, nor have I said or implied, that real spreadsheet jocks don't have a perfect justification for using Excel. What I am saying (again) is that the vast majority of spreadsheet users aren't spreadsheet jocks, not by a long shot. I receive .xls files on a regular basis and have done for decades, but I cannot remember one instance where any included even a single calculation. They are simple tables, and not very large tables at that. Not only does this task not require Excel, it doesn't even require a spreadsheet. Know it or not, Excel is being used as a glorified table maker by all but a small fraction of users within the huge installed base. My sense is the real power users are in the low single digits.

Word is a similar issue. Once again, I've been dealing with Word documents for decades. The vast majority are almost entirely unformatted. Very, very few Word users seem to know how to use paragraph and character styles. Consequently, every single paragraph is set to the default "normal" style, with fonts, indents, tabs, line spacing, page breaks, all hand-set. A lot of the time even the tabs aren't set properly and indents are done with the spacebar. So why are only a tiny fraction of Word users capable of using it for even the most basic word processing tasks? I spend an awful lot of my time cleaning up the messes other people make with Word, so I know from experience how poorly it is being used. To claim that people who create these totally clueless Word documents must use Word instead of something else for the sake of "compatibility" is to miss the entire point of using these tools. The brainwashing is the received wisdom that everyone must use the "standards" or something terrible might happen.

Experience matters. I happen to have a lot of it.

I'll try and highlighting it this time, the aformentioned is incorrect. You seem to think that because of your "decades" of experience, that your assumptions become fact. While I can also say I have decades of experience and beg to differ.

 

[Tech198]

So, MS finally did it...

Wasn't thee some controversy over this originally ?

Seems like MS came around after all..

 

[IJ Reilly]

I'll try and highlighting it this time, the aformentioned is incorrect. You seem to think that because of your "decades" of experience, that your assumptions become fact. While I can also say I have decades of experience and beg to differ.

So what you're saying is, your experience cancels out mine? Nice argument.

The funny thing is, I am not questioning whether some people make very good use of Excel's power. I already know that. What I am adding to this discussion is that power users do not make up the majority of Excel users. Probably not even close. This is blinding obvious to me, and this observation is confirmed not simply by my experience, but by considering the vast installed base of Microsoft Office. What proportion of PC or Mac owners do you suppose don't have Office installed?

Before responding, you might want to take your own arguments into consideration.

 

[LaskoVortex]

So what you're saying is, your experience cancels out mine? Nice argument.

I think you are saying that your experience cancels out everyone else's.

 

[IJ Reilly]

I think you are saying that your experience cancels out everyone else's.

Absolutely not, but understanding that requires actually reading what I write. I know, that's too much trouble for a lot of people.

 

[Serelus]

So what you're saying is, your experience cancels out mine? Nice argument.

The funny thing is, I am not questioning whether some people make very good use of Excel's power. I already know that. What I am adding to this discussion is that power users do not make up the majority of Excel users. Probably not even close. This is blinding obvious to me, and this observation is confirmed not simply by my experience, but by considering the vast installed base of Microsoft Office. What proportion of PC or Mac owners do you suppose don't have Office installed?

Before responding, you might want to take your own arguments into consideration.

I know that this is what you're saying, I am trying to get you to understand that this statement is baseless and unfounded if only coming from your sole experience. My experience doesn't cancel out anything obviously. I am saying your experience doesn't make anything you say a fact. If you're going to make statements like the one I just highlighted, please provide a clear source or reference rather that saying; "in my experience, therefore it is so."

So to your Microsoft Office example, I can merely say that while alot of them may have Microsoft Office installed, this does not necessarily mean they are using Excel.

The people I exchange my excel spreadsheets with are all power users.
Summing this all up, I can conclude we both have a different stance in the overall user base of Excel. I say, you're the one making the claims that people are brainwashed, and the majority of them are not power users.

Have something to back it up with, other than just experience.

 

[IJ Reilly]

I know that this is what you're saying, I am trying to get you to understand that this statement is baseless and unfounded if only coming from your sole experience. My experience doesn't cancel out anything obviously. I am saying your experience doesn't make anything you say a fact. If you're going to make statements like the one I just highlighted, please provide a clear source or reference rather that saying; "in my experience, therefore it is so."

So to your Microsoft Office example, I can merely say that while alot of them may have Microsoft Office installed, this does not necessarily mean they are using Excel.

The people I exchange my excel spreadsheets with are all power users.
Summing this all up, I can conclude we both have a different stance in the overall user base of Excel. I say, you're the one making the claims that people are brainwashed, and the majority of them are not power users.

Have something to back it up with, other than just experience.

My experience isn't baseless. If my argument based on my experience is insufficient, then so is yours. That's why I advised you to take your own argument into consideration before responding again. I can see you won't do that, so I think we're done.

 

[Traverse]

Sorry, but where I work (university) nobody uses MS Word for any kind of documents unless it's supposed to be some kind of joke. And if I look at what my colleagues at other institutions use, the only thing that I can say about MS Word is that it is universally ignored. But maybe that's just at university.

I can assure it, it is just your university.

----------

Yeah, you are much better off paying 399.99 for Professional each year you want to upgrade to get all of the same features on 1 PC or mac and not getting the online storage or international Skype calling.

Even if you upgraded once every 4 years and you needed office on a PC and a mac, you would be spending "MORE" buying non-subscription versions and not have access to the iPad version. What if you had more than two computers that needed office?

With the sub, you can install everything you get in the Professional version of Office on 5 PCs or Mac and up to 5 tablets.

Can you explain to me how your math adds up? You sound like one of those people who spend 50 bucks on gas driving around with their coupons all across town so they can "save" 20 bucks on groceries.

Well, your average school student or household will use Word, maybe Powerpoint, and maybe excel for light budgeting, but they won't use the full Pro suite. Now as an accounting major, I heavily use Word, Excel, Access, and will probably use Outlook.

If you need Pro, then it is an amazing deal, if you can get buy on TextEdit then it sucks.

 

[Serelus]

My experience isn't baseless. If my argument based on my experience is insufficient, then so is yours. That's why I advised you to take your own argument into consideration before responding again. I can see you won't do that, so I think we're done.

I never said your experience is baseless, I said the statement I highlighted is. Again, you're the one assuming the larger proportion of Excel Users aren't power users. If that's what you claim, back it up with something. I am not arguing your experience with my own, rather, I am questioning the validity of your statement.

If you cannot comprehend the fact that saying something out of experience doesn't make it fact. Then there is indeed no point to argue.

 

[LaskoVortex]

Again, you're the one assuming the larger proportion of Excel Users aren't power users.

That a larger portion aren't power users is bundled into the definition of "power user".

 

[smoledman]

You can pay $400 for the full Office suite once every 4 years and get no feature updates that whole time

OR

pay $400 over 4 years for O365 and get dozens of updates during that time. I think the sub-model will work AS long as people are truly getting an constantly iterated product that is better and doesn't impact their existing workflow. As long as MS doesn't screw that up, O365 is golden.

 

[Mangchi]

Edit wrong thread.

 

[Michael Goff]

That a larger portion aren't power users is bundled into the definition of "power user".

According to the definition my computer gives?

"computing: a user who needs products having the most features and the fastest performance"

That hardly means it has to be the minority.