Apple's Free iWork Pressures Microsoft Office - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Government // Enterprise Architecture
News
9/17/2013
03:40 PM
Connect Directly
Twitter
RSS
E-Mail
50%
50%

Apple's Free iWork Pressures Microsoft Office

Apple challenges Microsoft to release Office for the iPad by offering its iWork suite for free to new customers. How will Microsoft respond?

iPhone 5c, 5s: 10 Smart Design Choices
iPhone 5c, 5s: 10 Smart Design Choices
(click image for larger view)
In addition to debuting new iPhones last week, Apple also announced that people who buy new iOS devices will be able to download the company's iWork mobile productivity suite for free.

The move is a potentially big deal; Microsoft's refusal to release an iPad-optimized version of Office has drawn ire from a number of analysts and shareholders who feel the company could reap billions with such a release. Microsoft has instead attempted to position Office as one of Windows 8 and Windows RT tablets' differentiating features. With iWork now filling a role that might have been filled by Office, Microsoft's options might be shrinking.

Indeed, the iPad is still the top individual tablet line both among consumers and in the enterprise. Research firm IDC projects tablet shipments will exceed PC shipments this quarter, and Apple's new iPads, expected later this fall, will almost certainly be a huge success. Given this context, will Apple's free iWork force Microsoft's hand? Here are five factors to consider.

1. Many tablet users are interested in basic productivity. iWork caters to this interest.

PCs remain the preferred option for heavy-duty productivity, with tablets praised more for their content-consumption capabilities. Still, many tablet users want to do more than surf the Web, read email, watch videos and share photos on social media. A recent Forrester study found that almost two-thirds of knowledge workers want to use keyboards with their tablets, for example, which suggests a need for legitimate word-processing and project-creation capabilities. By offering iWork for free, Apple has only made the iPad that much more suitable for such demands.

[ Releasing bad software updates doesn't help Microsoft's case. See Microsoft Nukes Buggy Office 2013 Update. ]

Granted, Apple has left iPad keyboards mostly to third-party companies such as Logitech. But users haven't seemed deterred. As Forrester analyst David Johnson noted in an interview, "A lot of people are using keyboards on their iPads."

2. iWork could hurt Windows tablet sales.

Given the aforementioned Forrester study, it's curious that keyboard-centric Windows tablets such as the Surface Pro and Surface RT have sold so poorly. Windows 8.1 and Windows RT 8.1 tablet could still help Microsoft turn things around, but analysts expect iPads to hold their ground.

Even before the iWork announcement, experts were confident in the iPad line's continued popularity. In a July study, Gartner analyst Mark Cotner concluded Windows tablets will not displace iPads in the enterprise. He noted that users prefer the iOS experience, that iOS can be more productive in a multi-device workflow than some IT managers realize, and that employees will continue to bring their iPads into the office, even if corporate-owned Windows tablets are deployed.

A recent Forrester survey, meanwhile, found that 44% of enterprise tablet users prefer iOS, compared to only 14% who prefer Windows 8. These results are a dramatic shift from a similar Forrester study conducted with a different group of respondents last year, just before Windows 8 launched. In that report, almost one-third of participants were interested in a Windows tablet, with only 26% opting for iOS.

With iWork added to this strong base, the Pad will only grow more attractive, according to Gartner analyst Carolina Milanesi. In an email, she said iWork should further enable iOS devices to integrate into the enterprise and could persuade users that they don't need Office for everyday productivity.

3. iWork pressures Microsoft not only to release Office for the iPad, but also to price it competitively.

According to ZDnet, Microsoft might wait until late 2014 to release Office for the iPad. With iWork now in the equation, such a timeline might not be tenable. Forrester analyst David Johnson said iWork could be a "disruptor" because "with so many iPads out there, and with iWork on each, people are going to get used to it."

Milanesi said iWork should influence not only when Microsoft releases an iPad-optimized Office suite, but also how the products are priced. If the versions of Office for the iPhone and Android-based smartphones are any indication, this pressure could throw a wrench into Microsoft's plans. Users need an Office 365 subscription to use those apps, but due to iWork, the same tactic might not work for an iPad release.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Michael Endler
50%
50%
Michael Endler,
User Rank: Author
9/18/2013 | 8:21:19 PM
re: Apple's Free iWork Pressures Microsoft Office
Lots of good points. I think iWork makes it more likely that Microsoft will release the iPad for free or at a competitive price, but Microsoft might still require an Office 365 subscription, or charge a desktop-style price. Office gives Microsoft a lot of leverage, and the company's leadership might still feel confident about their position. If Windows 8.1 tablets sell well, that confidence might be valid.

On that point, I actually think the new Windows tablets will surprise some people. Windows 8.1 is no revelation, but it's easier to use, and all of the core apps are improved. Intel's new chips are also much better, and device prices are coming down. I can see why Microsoft hasn't folded on Office for iPad just yet.

But if Apple manages to sell a ton of iPads this holiday season, Microsoft will continue to face pressure, even if Windows tablets sell decently. If Apple sells a ton of iPads and Windows tablets don't see a strong uptick, that pressure will grow exponentially, as Shane indicated.

But even then, you might have a point. I think Forrester's David Johnson is right when he says consumers will use what's available; if users are accustomed to iWork by the time Microsoft gets around to releasing Office for the iPad, a lot of would-be customers will be past the point of caring. Even so, it's easy to overestimate iWork's appeal.

As you point out, alternative such as OpenOffice have been around for a while, and people are still clamoring for Office on the iPad. I raised a similar point in the article when I asked why iWork hasn't already silenced demand for an iPad-optimized version for Office, given that Apple's apps have been both cheap and available for a long time. Apple has promised new versions, and browser-based versions open up a lot of possibility, but until people actually start using and loving iWork in greater numbers, everything is speculative.

Most businesses will also keep using Office for the foreseeable future; the Windows cash cow might be in some jeopardy, but Microsoft has grown Office 365 revenue at a fantastic rate. As you point out, many enterprise tablets are PC compliments, not replacements. Businesses that fit this use model will probably stick Office on iPads no matter how well iWork is received, just because Office will fit better into existing workflows, and support easier round-tripping between PCs, corporate repositories, etc. In this scenario, Microsoft will have conceded some consumer business to Apple by waiting so long-- but it will still have retained the billions it reaps from businesses. And given the post-PC landscape, maybe Microsoft is okay with that.

But as I alluded in the article, I don't think Apple is trying to topple Office; that's as close to an impossible task as you'll find, unless you're talking about a decade-spanning campaign. Rather, I think Apple is trying to fragment the productivity landscape. When PCs were at the their peak, Microsoft got used to Office dominating everything: consumer, business, everything. Microsoft would like Office to be the productivity standard for mobile and hybrid devices as well, at least within the enterprise, and with free iWork apps, Apple is trying to limit Microsoft's progress. As for PCs, I don't think Apple believes iWork for iCloud will replace Office on Windows machines; but the cloud-based version makes it a lot easier to pair an iPad as a companion device to a Windows machine.
Michael Endler
50%
50%
Michael Endler,
User Rank: Author
9/18/2013 | 7:43:47 PM
re: Apple's Free iWork Pressures Microsoft Office
iWork is only free on iOS devices, but it's available on OS X and, once the cloud-based version is official, Windows. Also, once Windows 8.1 hits, Office will be free not only on RT tablets, but also on a variety of smaller Windows 8.1 devices (e.g. the Atom-based mini-tablets, which will actually run the full Win 8.1, not just RT, despite their small screens). But you've got a point; if Windows 8 tablets had been more successful, everyone would be talking about iWork as a reactionary move, rather than a proactive one.
Michael Endler
50%
50%
Michael Endler,
User Rank: Author
9/18/2013 | 5:41:19 PM
re: Apple's Free iWork Pressures Microsoft Office
In response to some stories several months back, some commentators defended Microsoft's decision to withhold Office from iPads. The first three responses to this story are all pretty critical of the strategy, though. Does anyone think Microsoft is making the right moves with its Office mobile strategy?
Shane M. O'Neill
50%
50%
Shane M. O'Neill,
User Rank: Author
9/18/2013 | 3:14:19 PM
re: Apple's Free iWork Pressures Microsoft Office
Good analysis here that covers all scenarios. I don't see how MS can keep Office on Windows devices only much longer. Free iWork on iOS only tightens the screws and is destined to expand iWork usage. If Windows 8.1 devices are a bust, MS will have to set the Office suite free. Too many alternatives out there to keep it in the Windows prison. Maybe it will be the new CEO's first big move to establish himself.
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

Commentary
Why IT Leaders Should Make Cloud Training a Top Priority
John Edwards, Technology Journalist & Author,  4/14/2021
Slideshows
10 Things Your Artificial Intelligence Initiative Needs to Succeed
Lisa Morgan, Freelance Writer,  4/20/2021
Commentary
Lessons I've Learned From My Career in Technology
Guest Commentary, Guest Commentary,  5/4/2021
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
Planning Your Digital Transformation Roadmap
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
Slideshows
Flash Poll