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Microsoft’s blunder in milking its Office cash cow dry

Last week, I examined Microsoft's strategy of bundling Office with all 10.1in or smaller tablets and clamshell laptops. It appears that Microsoft has decided that these smaller devices will not be used for productivity, but the company is still giving users Office for free, just in case.

However, the company clearly thinks tablets and clamshell laptops larger than 11.1in will be used more for productivity. If people want to use Office on these devices, they must buy a copy.

I am highly intrigued by this approach. While full versions of Office work fine on smaller tablets, I suspect Microsoft's real motive is to start pushing these customers toward Office 365, the cloud-based subscription version.

Interestingly, Microsoft has been a big software supporter of the Mac OS from the beginning. I remember when Bill Gates made a commitment to write for the Mac at an event back in 1984. To this day Microsoft has kept that promise to support it with its Office suite of products.

But that is where Gates' support ends. Microsoft has decided not to make an Office version for iOS. I find this a bit odd since iPads are outselling Macs six to one and they have pretty much become the de facto standard in the enterprise world to date. Yes, Android tablets and even a few Windows tablets have started to gain some ground in IT but at the moment, the iPad rules the domain.

Microsoft's lack of support for iOS and Android is understandable. After all, the company sees Office as giving it a competitive edge that might increase adoption of its tablets within businesses. I can't fault it for that move. However, there is a problem with this strategy: While a local client of an app will be important in the short term, it is pretty clear that the online versions of these apps will become even more important. And these apps will be available on all platforms, not just one. Microsoft's current plan to only put Office on Windows tablets is a real mistake in the long run.

I have used Office since day one. Even today I still use it on my PCs and Macs for major reports, spreadsheets, and presentations. However, I am using it less and less each day since I use a tablet about 80 per cent of the time, and it isn't available for iOS or Android. This means that when I am on the iPad I use Pages, Keynote, and Numbers, and when I am on an Android tablet I use Google Docs, Sheets, and Slides.

Perhaps Microsoft should consider the Evernote model. While it does not have a spreadsheet or presentation program, it does have a word processing and notebook management tool available on almost any device, be it an iPhone or Galaxy S4, iPad or Android tablet, PC or Mac. There is a local version that resides on each device so I can use it when not connected. Once it gets a connection, it accesses the cloud and syncs all my devices.

If Microsoft had foresight it would have been the Evernote for consumers and businesses. It could have created an app platform across all devices and tied it to the cloud instead of giving Apple, Google, and Evernote the chance to own the customers that use its products. It could have made Office a cross-platform productivity tool that gives its competitors' customers access to a suite that they already know and love.

I realise that Office is still a cash cow for Microsoft but that revenue stream will dry up as more and more of us move to alternative tools that work on our multitude of devices. Microsoft could have given a basic version away free to everyone and then charged heavy users a subscription fee for the full version in the cloud. This strategy would ensure Office longevity because the current local version will become less important to businesses and consumers alike.

In the short term I suppose it makes sense to milk the cow dry, but by failing to create a cross-platform version Microsoft will force people who use iOS and Android towards alternative tools. As they become accustomed to using them instead of Office, demand for Office will decline in the long run.

I see this short-term thinking at Microsoft as a real blunder. In the not-to-distant future this move will bite it in the behind and take even more customers away from its apps which have for so long dominated the world of computing productivity.