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Will Microsoft Office Make the iOS Jump?

Doug Ehrman
February 28, 2013

One of the biggest hopes of enterprise users everywhere is that Microsoft (NASDAQ: MSFT) Office will become available on Apple (NASDAQ: AAPL) devices through iOS, specifically on iPads. Much ink has been spilled on the topic, and Microsoft officials always seem to tap dance away from the topic. The simple truth is that Office is a huge point of differentiation for the software giant that gives its Surface Pro tablet a fighting chance. Equally obvious is the reality that, by keeping a full version of Office off of Apple devices, Mr. Softy is probably leaving a lot of money on the table. Ultimately, I think this is the right call if Microsoft really wants to compete in this arena.

The Surface Pro
Microsoft's second-ever computer offering, the Surface Pro -- which is really a PC-tablet hybrid -- may have received mixed reviews, but there's one point where no dissension existed: The ability to run a full version of not only Windows, but the Office productivity suite, was a critical advantage for the device. The Wall Street Journal's Walt Mossberg complained that the device was too heavy to be a "real tablet," and that it wasn't heavy duty enough to be a competitive PC. The New York Times' David Pogue called the device a game-changer, and noted that it had the potential to usher in a new era in computing.

One of the points on which the two agreed was that the inclusion of Office helps the device standout. Pogue asks: "Are you getting it? This is a PC, not an iPad." While Mossberg is less enamored with the device, he does concede that "the Pro is a serviceable laptop, especially since, unlike on an iPad or Android tablet, you can use full-fledged PC programs." The takeaway here is that the ability of Microsoft's devices to run Office allows them to stand apart. Taking this unique feature away before the devices have had time to gain significant traction would undermine this effort.

Lost revenue
Earlier this month Adam Holt, an analyst at Morgan Stanley, estimated that the decision to forgo an Office release for iOS could be costing Microsoft as much as $2.5 billion in revenue:

Office on iPad could be a several billion dollar opportunity. While MSFT has resisted offering a full version of Office for the iOS, the company may ultimately decide there is more upside with Office on iPads, particularly if Win tablets fall short of expectations. The Surface RT likely sold only 900,000-1 million units in calendar Q4, while OEMs have pulled back on tablet builds and it may be difficult for MSFT to reach much more than 10% tablet share in calendar 2013.

Holt further notes that the numbers that Microsoft could achieve are even higher if the company would simultaneously release a Google (NASDAQ: GOOG) Android version of the software. In certain ways, an Android release would make even more sense, as the company has seen much stiffer competition for productivity uses from Google Apps than from anything on iOS. While Apple offers various productivity applications like Pages and Numb