Microsoft’s Strategy for Office

This topic came up in a discussion at work yesterday – what is Microsoft doing with Microsoft Office at the moment? What is Microsoft’s strategy with respect to its office productivity suite? The answer seems clear to me. Let’s look at recent trends. Firstly, over the last few months Microsoft has released parts of its Office suite on a range of different platforms:

  • Office on Mac
  • OneNote on iOS
  • One Note for Android
  • Lync on iOS
  • Lync on Android

And there are now rumours of Office turning up on iPads (that is for iOS 5).

Secondly, their sales of Windows are tanking – they are rapidly losing their dominance in the operating system space. This is caused by a number of factors, but the largest one is the rise of smart devices (smart phones and tablets) as I have previously discussed, a market space dominated by Apple’s iOS and Google’s Android.

Thirdly, there is the release and importance of Office365, Microsoft’s cloud based office productivity suite, a sort of “Office-Lite” in the cloud. We can also see that while Office365 is part of a cloud play, it is also moving towards a device independence play as well (though the current dependence on a Windows based client for higher functions limits this).

Lastly, there is the fact that Microsoft makes most of its money from Office. Currently, however, Office is effectively tied to Windows – you can run Office on Windows or Mac. As the proportion of devices running Windows reduces, so does the size of their potential market for Office products.

These factors seem to me to point to a clear strategy from Microsoft for Office. The strategy hinted at with the release of OneNote and Lync would appear to be to free Office from the ties to the underlying OS – to free it from Windows. This means that as Windows’ market share of reduces, Office won’t be dragged down with it. Let’s face it – Office is still hands down the best productivity suite out there. If it becomes available on iOS and Android it will almost certainly become the dominant office productivity suite on both of those platforms. This would rescue Microsoft’s Office revenues from the downward gravitational pull of Windows – or at least that seems to be their plan.

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One Comment to “Microsoft’s Strategy for Office”

  1. Hiya Doug – Pete from Microsoft Wellington here 🙂 There absolutely is a move to extend our great productivity experiences such as Lync onto other significant platforms, while still offering the best end-end experience on a Windows platform.

    In regards to Windows 7 ‘tanking’ it pays to separate market share (and the definition of the market) from sales volume.

    Have a look at this article: http://desktops.cbronline.com/news/microsofts-windows-7-sales-slipping200112. Even with a forecast decline before Windows 8 ramps things back up again “Microsoft has sold over 525 million Windows 7 licenses since launch, and 175 million licenses in the September to December quarter. The operating system remains Microsoft’s best selling system ever. By comparison, Windows XP sold 210m copies in two and half years.”

    Yes the environment has changed and we are *absolutely* responding to it with our best products ever – Windows 7, Office 2010, Windows 8 and Office “Wave 15” . . . . (and plenty more!).

    Talk soon, Pete

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