Perspective: Microsoft hedges on Office for iPad, cites ‘thoughtful’ decisions

thoughtful: adjective, characterized by or manifesting careful thought

Thoughtful. T-h-o-u-g-h-t-f-u-l. Thoughtful.

That was the watchword yesterday for Tami Reller, Microsoft’s chief of marketing, when she was asked what plans the company has to extend its lucrative Office franchise to mobile platforms other than Windows.

“As we step back and say, these core applications, these core brands that are so important to enterprise customers and consumers, how do we make sure that we’re thoughtful about what we’re doing on the Windows platform, as well as cognizant of the fact that there’s other devices in their lives (emphasis in original),” Reller replied when she was asked about the status of the decision to put the productivity suite on other operating systems.

“So you’ll see us be thoughtful about how and when we bring what applications to what platforms,” Reller added at the Goldman Sachs-sponsored technology conference where she spoke Thursday.

A follow-up question from the moderator brought even more from Reller, who talked about the importance of differentiating Windows to customers, both end users and OEMs (original equipment manufacturers), the vendors that make and sell devices. “A part of that [differentiation] is Office, for sure,” Reller said.

That implied Office would still be used as a carrot for customers to stick with Windows, not desert the OS for rivals, a hint she quickly made even clearer. “With Windows, we’re obviously spending a lot of time thinking about how we continue to differentiate the full Windows experience, particularly as we think about our partners and how we differentiate for them to pick Windows over Android.”

If that wasn’t clear enough, Reller pointed out that changes to Office’s platforms would be a business decision, not one based on customer requests.

“We come at it from that angle, which is ‘What businesses do we need to drive forward?,'” said Reller. “That’s how we will make the decision [to go cross-platform]. It really ends up being business by business, product by product. There’s no sweeping one decision.”

Reller’s use of thoughtful and her comments about differentiation made it sound like Microsoft is still thinking through the strategic implications of untangling Office from Windows, and weighing the advantage to Windows that would be lost if it offers apps for the millions of Apple iPads and Android-powered tablets in circulation.

That would be at odds with former CEO Steve Ballmer’s plain-spoken pledge last fall that Microsoft would bring a touch-first version of Office to the iPad and Android after it had been released for Windows 8, 8.1 — or if the timeline was even further in the future — for Windows 9.
In fact, Ballmer said work on a touch-first Office, was “in progress … for both Windows 8 and other platforms.”

To be clear, Reller — a last-minute substitute for new CEO Sayta Nadella, who before his promotion had been slated to appear at Thursday’s Goldman Sachs event — did not say that Office would not follow the trajectory outlined by Ballmer in 2013. But neither did she parrot Ballmer, who had led every outside observer, customers included, to believe that the decision had been made to eventually cut Office’s tie to Windows on mobile. That would have been Reller’s easiest answer to the questions.
Instead, her comments, dissected because Microsoft has declined to go public with a roadmap of its plans for touch-first Office on Windows, much less on iOS and Android, moved the decision to the “undecided” column.

Industry analysts have called on Microsoft to detach Office from Windows in mobile — the suite has long been available for the most popular desktop alternative, Apple’s OS X — and recently repeated their arguments after Nadella’s Feb. 4 promotion to CEO.
Their renewed calls had been encouraged, some said, by Nadella’s promise to make Microsoft’s strategy “cloud-first, mobile-first,” phrases that Reller used herself Thursday. If mobile was a company-wide priority, then that meant Office should be spread across mobile platforms, not available only on Windows, they reasoned.

The outside consensus has been that Microsoft has declined to sell Office on Android and iOS because the company sees the suite as a major selling point for Windows overall, Windows 8-powered tablets in particular. It’s no coincidence that a lot of Windows device advertising and marketing, including that for Microsoft’s own Surface line, emphasizes Office.

Wanting to retain that advantage, the Windows and in-house hardware teams blocked Office from appearing on other platforms, the theory went. Although the group responsible for Office likely lobbied for a release sooner rather than later, claiming it can book impressive revenue, its arguments have been shot down.

Many now view that strategy as a flop.

“It’s a strategy that has simultaneously failed to drive adoption of these [Windows] devices and put at risk Office’s dominance in the business productivity market,” research firm IDC contended in a note to clients last week. “The company is not only leaving a great deal of money on the table, but it’s also forcing tablet users to find alternatives to Office.”

Ben Thompson, an independent analyst who covers technology on his Stratechery website, has called it a “strategy tax,” in other words, a decision that while harmful to a specific product, somehow furthers larger goals of the company as a whole.
During her answers to other questions in the half-hour, Reller stuck to the lines drawn earlier by her former boss Ballmer, and her new one, Nadella. For example, she used the phrases Ballmer had promoted, including “devices and services” and “family of devices” to describe Microsoft’s ongoing, overarching strategy and its willingness to create a broader array of in-house hardware. “We want to have that family of devices…. Where there are interesting device categories, we want to play,” Reller said.

Reller also echoed the “cloud-first, mobile-first” and “software powered” phrases that Nadella used in a staged interview on the Microsoft’s campus the day he was appointed CEO.

“It’s now about execution,” said Reller. “Sure, there are some strategic elements that need refinement, no doubt about it. [But] it’s now about mobilizing. That’s something that Satya [Nadella] does particularly well. He has the ability to mobilize teams to just get after it.”

Later, near the end of her time on stage, Reller hit on that one more time. “But this [devices and services] is a big strategy, right? There are elements of it that need to be really codified and taken forward and now fully executed upon.”

Reller also touted a new sales figure for the struggling Windows 8, which, she said, has passed the 200 million licenses mark, a number that included those bought by consumers as upgrades and by OEMs for use on new machines.

It was the first milestone mentioned by Microsoft since May 2013, when the company said it had sold 100 million.

Windows 7 broke the 240-million mark 12 months after an October 2009 launch, but its successor has lagged behind, dogged by slumping PC sales, customer apathy or outright antagonism, and an inability to gain meaningful share in tablets.

According to Web metrics company Net Applications, Windows 8’s user share in January was less than half that of Windows 7 at the same point in its post-launch timetable.

“With Windows 8 we’ve been very thoughtful about what’s going well, what’s not going well, and how we change that,” said Reller.

There’s thoughtful again.