Microsoft's new Office: More strategic than Windows 8?

Microsoft's new Office: More strategic than Windows 8?

Summary: With the latest Office on deck, Microsoft aims to create its own business tech halo effect even if the enterprise uptake for Windows 8 is slow.


Microsoft is expected to take the wraps off of its latest Office and the product launch may be more strategically critical than Windows 8. Of course, you'd never know the role of Office 15 judging by the headlines. The numbers, however, tell a different tale.

As Mary Jo Foley noted, Office, which is likely to be known as Office 2013, has a few question marks. It's unclear how folks will get it. Functionality is an unknown---at least for those of us without a copy of the beta---and integration with Windows 8 will be interesting.

However, Office 2013 is critical for Microsoft. In the consumer world, Windows 8 is the glue that's supposed to give Microsoft a PC/tablet/smartphone play. In business technology, Office is the product that has its own halo effect. Office 2013 will integrate well with Exchange, SharePoint and Lync. The new Office will also tie into Microsoft's Office 365 cloud suite.

In other words, Windows 8 can have a slow ramp, but Office 2013 can drive other services. Remember that Microsoft's Windows juggernaut is the best known cash cow, but the business division---Office mostly---and servers and tools are just as profitable and feature as much revenue if not more.

A successful Office 2013 launch can do the following for Microsoft:

  • Offset a potentially slow corporate uptake of Windows 8;
  • Drive synergies with Microsoft's cloud Office efforts;
  • Connect into Lync, SharePoint and other corporate juggernauts;
  • And give people a reason to buy a Windows tablet.

Ahead of Microsoft's fiscal fourth quarter earnings Thursday, analysts are expecting strong enterprise sales and weak PC and Windows results. Morgan Stanley analyst Adam Holt is expecting Windows revenue in the fourth quarter to fall 14 percent from a year ago.

Here's a look at Microsoft's third quarter for its business division.




The bottom line here is that Microsoft has a killer product cycle ahead and by the numbers the financial success of Windows 8 could be overshadowed by Windows Server 2012, a new SQL, Dynamics and naturally Office 2013.

Topics: Enterprise Software, Microsoft, Windows

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  • Corporate uptake?

    I think the big thing that Microsoft is looking at doing is pushing BYOD over corporate uptake. Since OEM's will be able to pre-purchase Office for pre-installation, this means that consumers buying systems will get Office already installed, so BYOD will become more popular for corporate decision makers. Management solutions like Intune will see a rise in uptake since it manages every OS without the necessity of domain membership.
    • Exactly

      Considering businesses are just now upgrading to Windows 7 from a 10+ year old OS (Win XP), I don't think they expect or are worried about businesses adopting Windows 8 right away. Businesses have always been slow to adopt new OS releases, even when they are not as profound a change as Windows 8.

      What they do hope for I think is that BYOD will see a massive increase as a business is more likely to accept a Windows device into their already Windows dominate and integrated network over other Mobile devices like iPad/Android tablets. Plus, if you add the benefit of the Office package and the possible legacy app installation, BYOD is much more attractive for businesses with Windows 8.
      • Let's talk strategic

        Microsoft Office should have been ported to the iPad by now. And Microsoft should be actively working on a port to Android, for tablets.

        By not looking forward to mobile devices, where Microsoft Windows is not and will not be king, Microsoft is putting Microsoft Office at risk.
        Rabid Howler Monkey
        • @Rabid Howler Monkey

          My understanding of the deal is that Apple licenses develops it's own version of Office based on the MS product. So it's not MS's perogative to develop for the iPad. But even if it is, it's genius to hold off as businesses and employees will buy MS hardware if they can't get a new version on an Android or Apple device. It would be similar to the tactic they took with the XBox. The XBox is the only console with Direct X graphics. In spite of having the same games (pretty much) as the Playstation and lacking HD support the XBox won because of one little variable that everybody figured wouldn't matter. The games are gorgeous - and therfore more immersive.
          • Your understanding is incorrect.

            Microsoft has a substantial number of employees producing MacOS products. This has been the case since the launch of the original 128K Mac which came with the calculator desk accessory coded by a Microsoft employee.

            Microsoft is a software company first and foremost. It's hardware ventures have mostly been in pursuit of increasing the market for their software. Their very first hardware product was a Z80 card for the Apple 8-bit systems to allow them to run CP/M software. By no small coincidence, Microsoft's primary platform back then was CP/M. But Microsoft also did TRS-80 languages and other items. They've always been interested in platforms that could deliver the numbers and the Mac has done that for them more often than not, albeit a much smaller market than DOS/Windows. There were many years in which Microsft made greater profits off the MAc than Apple, when the company was in disarray but the platform still moving many Office licenses.
          • @ epobirs

            You are right and wrong.

            You do understand Microsoft developing Excel for Mac in 1983 is different from Microsoft developing Excel for iOS in 2012. These are vastly different ecosystems and business models. Mac was in fact an open platform with Lotus and Microsoft software title support up until a point (till 1987???). Windows was in fact modeled after Mac ecosystem with the additional openness of hardware OEM partners.

            If Microsoft develops Office for iPad first and releases it, it simply proves to their dearest customers - enterprise - that iOS penetration which is now on the periphery can be full-throttled. That would actually signal to their hardware OEMs that they are really abandoning the OEM market. It is not Surface that is important here. It is actually the Win* ecosystem that is important here. Channel partners, ISVs and hardware OEMs can and should look to Microsoft delivering first-class citizen software for their ecosystem - no matter the OEM headaches that Microsoft faces. That is what gave the Microsoft management their 'giant' technology status. If they anoint Office for iOS as first-class citizen on par with Office for Windows, then it is time to see Microsoft as a pure software company riding on iOS and other platforms. And we are not at that point. And there is a chance in business history that we may never be.

            In fact, I will not be surprised to find Office 2013 release in October OEMed with WinRT and Win8 Pro after which Office 2013 will release for iOS in December this year or March of next year only if Win8 penetration in consumer market is slow. If enterprise penetration is as expected, they may not even release it though the code may be ready. If they release Office for Android, then Microsoft has definitely lost the 2nd place in the mobile platform war to Android. And it does not look like that is the case. Not yet.
          • Beating the dead horse

            Ok, Microsoft can pretend as much as they will, but fact is they have no OS to compete in the mobile market. They have several experiments, of course.

            Fact is, Microsoft has always been applications company, not systems company. This is why they need the OEMs: to provide system integration in the first place, not just solder components on PCBs and put them in pretty cases.

            Microsoft not releasing Office for the iPad is one of their bigger mistakes of late. That will cost them a lot in terms of decreased Office license sales. Because, let's face it, there are other application developers besides Microsoft out there and some of then are no worse than Microsoft in producing office productivity applications. And, those other developers have no problem to code their software for Apple's platform, for Microsoft's platform and for any other platform they see business.
          • Exactly correct

            Customers used to insist on having every document sent to them as Word docs. Now they're more interested in having something they can open on their iPad.
        • Touch is for Consumers, not Producers!

          The problem with tablets and smartphones is they are consumer devices and lack precision. This means they are geared towards consumption of data rather than production of useful analysis or creative content. Ever think you will see an Architect using his fingers to draw in Autocad? Why not? Exactly, there is no precision with fingers.

          Hence, a creative program which requires some degree of precision to operate to crate or edit or manipulate content has not been created for touchscreen devices. One most definitely will be, but I guarantee it will be dumbed down. Soon, only the creators will have desk/laptops and all the consumers will only have touchscreens.

          PT Barnum and Steve Jobs had one thing in common,: neither went broke underestimating the intelligence of the American public. Apple almost did in the late nineties by overestimating it. They never will again. They are now primarily a consumer entertainment company, like Sony from whom they took market share. Their move into the enterprise is in full retreat.
          • have you not used autocad in awhile?

            Since when is accuracy for a CAD program based upon the engineer's or designer's ability to correctly draw pixels on a screen. Those pixels are an approximation of the drawing's real value anyway. To me, the fastest method on most current CAD programs, is to roughly sketch out an entire outline and fill in the PRECISE values later. I see no reason why I can't design a complicated part in Creo or Solidworks on a tablet.

            Mudbox or Zbrush go great with a touchscreen. There is a simplified version of Mudbox on iPad already only limited by the processor (which will obviously change with future devices).

            Illustrator, Photoshop, etc. the list goes on for all CAD programs that can reap the benefit of tablets and touchscreens.

            Just the simple gesture of using a pinch to zoom with my left hand while sketching with my right hand would greatly increase my productivity.
          • AutoCAD on the iPad

            To add a bit..

            One of the applications I appreciate greatly on my iPad (and my iPhone, btw) is AutoCAD WS. It lets me not only view the drawings, annotate drawings and do field work (like checking GPS coordinates of the objects), but also lets me edit the drawings.

            Most CAD professionals know full well, that an tablet is *the* device to use for CAD work. Not fight with the mouse and keyboard. Probably, because designers historically do these things on a drawing board. With a computer, things are just way easier. You want to draw an precise 100.00 mm line? Just draw "a line" on your tablet, tap the line and set it's length to 100.00mm and you are done.

            The precision of the CAD application is not in the large screen, but in it's internal representation and processing of CAD data. That huge screen is there to make it easier to see larger part of the drawing at once. You can't however hold an large screen in your hands and at close distance the iPad high resolution lets you see just about the same amount of detail.
          • Power over user interface everytime!

            I'm a bit late to this conversation but I'd like to add that as a Mechanical Engineer who over the course of the last 15 years has used AutoCAD, Inventor, Catia and currently SolidWorks, tablets are currently useless. Why? Power.
            Until a tablet can give the same performance as a workstation with an 8 core CPU, 16GB DDR3 RAM and a high end (professional, NOT consumer), graphics card then they will never get off the ground in real engineering terms.
            Also, as most engineers (not all admittedly), will be working from a desk and not travelling about, there's just no point in a tablet.
            As for touch screen, it's bad enough people touching the monitor at best of times and leaving their greasy finger marks everywhere!
            Dave Downey
          • so why not just attach a mouse to the tablet?

            i think Apple believes is 'unpure' to allow a mouse but MS is more practical.
  • Microsoft innovation == Business heartburn

    We have *almost* finished our corporate upgrade from Office 2003 to Office 2007. It involved lots of retraining and support cost increases, all in the face of no measurable productivity gain. All of our new PC purchases come with 2007, and we see no particular benefit in 2010.

    Most problematic has been Microsoft's continued assumption that every office PC has full broadband and unlimited Internet access. In a secured environment this causes a lot of additional support headaches as people try to do things and then get wrapped around the axles when Office tries to go out to the mothership for some little thing. Office 2010 is particularly bad about this.

    These hooks create not only information leaks but attack vectors and our security people don't like it one bit. It's convinced our strategy folks that Microsoft is throwing away security considerations just to get better "control" of the user base and keep them directed to Microsoft for all things. We continue to look for alternatives, but the best one is just to stay on the older version of Office for now.

    It might play for consumers, but enterprise customers need to WATCH OUT for this trend, it will be much worse for support and security issues, and Office 2013 looks to have it built in to almost every single application and function.
    terry flores
    • Office & internet connectivity

      "Most problematic has been Microsoft's continued assumption that every office PC has full broadband and unlimited Internet access."

      Can you give details? We have users with restrictions to the internet and Office 2007/2010 seems to be working OK.
    • Say what???

      "We have *almost* finished our corporate upgrade from Office 2003 to Office 2007. It involved lots of retraining and support cost increases,"

      Then you must have an office full of idiots.
      • Pompous much?

        They may excel in what they do, but still not be a computer expert.

        When I get my hair cut, do I call my hairdresser an idiot because he can't use Windows 8?

        Or the dentist?

        The only idiot, are those who think everyone should have the same talents as them. However, in you're case, I can't think of any talent.
        • beautifully said noaxtogrind is a pompus you know what

          He and Loverock Davidson are the two most obnoxious posters on zdnet.
          Over and Out
        • That depends

          Is it their job to work with computers?
          Michael Alan Goff
      • Increased support costs?

        I'm sorry but if your support costs have increased then it's because your training wasn't good enough. We migrated from 2003 to 2007 and then to 2010 with little or no training for users. 2007 to 2010 was no training at all since the product UIs are much the same. Are you sure you increased support costs are not as a result of poor training?