Microsoft finally gets Office on the iPad
Microsoft (MSFT) has finally moved beyond Windows with the launch of Office for Apple’s (AAPL) iPad. This is the first major announcement that the new CEO of Microsoft, Satya Nadella, has made. We believe this is a good move by the company, which is trying to increase its cloud offerings and at the same time get away from the exclusive software offering for its Windows operating system. The company had been reluctant to do this in the past, when Windows was the dominant operating system on PCs, but in the modern era of smartphone and tablets, this policy doesn’t hold any merit.
Microsoft faces tough competition in an otherwise booming cloud services market
Microsoft’s move to introduce Office on iPad is good, but it needs to do much more to compete against rivals Google (GOOG) and Amazon (AMZN) in the cloud services market. According to IDC, the cloud services market is expected to grow from $47.4 billion in 2013 to $107.2 billion in 2017 at a CAGR (compound annual growth rate) of 23.5%. While Microsoft’s move will help it increase its subscription revenues, competitors have also been quite active in the cloud market. For instance, Google recently announced drastic price cuts for its own cloud service, while Cisco (CSCO) announced that it will make a $1 billion investment to build its expanded cloud business. Another big player, Intel (INTC), recently announced a significant investment of money and technology in Cloudera, a company that provides Hadoop-based software. So there’s a lot happening in the cloud services market that Microsoft would be keen to tap into.
Key changes made for Office on the iPad
Firstly, the new Office application is a combination of three Office programs—Word, Excel, and PowerPoint—which are the most used Office applications. Secondly, the new Office offers improved features, as it smartly uses the extra space on the tablet, and the touch screen interface makes it a better user experience. Thirdly, all the data that’s updated on the iPad from Office is automatically saved on cloud storage, so the same data is accessible from other devices. These improved features should help Microsoft gain some share in the cloud services market even though it has been late in introducing Office to other platforms.