Office 365 needs to embrace rival platforms

Microsoft's Office 365 Home Premium should be made available on other rival platforms such as Apple iOS and Google Android so user experience can be unified across various mobile devices. Its relatively pricey yearly subscription also has have been highlighted extensively since its recent launch.
According to Reed Wotiz, regional director of Office marketing at Microsoft Asia-Pacific, there are currently two options for consumers keen to access the latest Office software. The first is to sign up for Office 365 Home Premium for S$138 (US$110.49) a year, which can be installed on up to five devices and includes Skype world minutes and 20 gigabytes (GB) of SkyDrive storage.

For consumers who do not require the additional services bundled with the Office suite, Wotiz recommended they purchase the software as a traditional suite with a single install.
"The price of the Office 365 subscription reflects the value you get," he pointed out. "One subscription serves the entire household. It includes the latest and most complete set of Office applications [and] works across up to five devices, including Windows tablets, PCs and Macs."

He added that Office 365 Home Premium is available in Asia in markets including Australia, Bangladesh, Brunei, Cambodia, Indonesia, South Korea, Laos, Philippines, Singapore, Sri Lanka, and Vietnam.

Analysts question pricing, subscription model

However, Michael Silver, research vice president and distinguished analyst at Gartner, said the S$138 (US$110.49) yearly subscription contributes to its view that initial uptake on Office 365 Home Premium will not be stellar.
"We're generally skeptical that uptake will be strong initially. Consumers are not used to paying an annual fee for office productivity suites and the price may prove to be higher than they expect," Silver said. "The prior version of Office 2010 had a home and student version which could be installed on three devices for between US$100 and US$150, though it included fewer bundled products, so [the current pricing] is very high in comparison."  
Tang Pin-Chen, research analyst at Canalys, added that while Office 365 Home Premium offers greater value to consumers, the subscription-based model is still highly unproven today. The analyst added it remains to be seen whether it will be a better option to a boxed software offering.
Tang pointed out that most consumers will not need to upgrade to the latest version of Office, which typically refreshes every three years, and they will use whatever version they have for as long as possible to stretch the value of their purchase.
"Although a subscription-based model will allow pricing to start off lower, paying it through installments [or yearly subscription] might actually cost more in the long run as compared to buying a boxed version of Office," he noted. "Hence, we feel the yearly pricing is still prohibitive for most consumers as they may be paying for more than what they actually need on a regular basis."
He added that Microsoft has to realize it is no longer the monopoly player in the productivity tools market, as competitors such as Google and even Evernote are providing tools to average consumers at low to no cost.
As such, Redmond's pricing strategy needs to reflect the market landscape, he said.

Availability on rival platforms desired

Price was a key consideration for one consumer ZDNet Asia spoke to. Lim Chih Yang, assistant vice president at OCBC, said while the S$138 for software, online storage and installation for five devices is "reasonable", a more affordable S$99 (US$79.25) a year would have mass market appeal.

"Access on iPad and Android devices is important for road warriors, so even if Microsoft prices down its yearly subscription, I will only subscribe if it gives me seamless access across all devices."

Additionally, he said he is only willing to part with the cash if Office 365 is available across all his devices, namely, Apple's MacBook Air, iPad, the office PC desktop, and iPhone, "with no formatting issues".
Lim explained: "Access on iPad and Android devices is important for road warriors, so even if Microsoft prices down its yearly subscription, I will only subscribe if it gives me seamless access across all devices."
The two analysts also picked up on the need to open access to rival platforms. Silver said if Microsoft had versions of Office for the iOS or Android operating systems (OSes), its offering would likely be "much more compelling".
Tang also noted that Canalys' fourth quarter 2012 data shows Microsoft currently holds only 3.4 percent of the total tablet market worldwide, adding that in order for Office 365 Home Premium to see more success, the software vendor has to open it up to other ecosystems.
"We feel that Office 365 Home Premium needs to be opened to more OSes and prices definitely need to be more competitive in order to spur consumers to purchase it," he reiterated.
Then there will be consumers who, regardless of the marketing efforts put in by Microsoft, will be hesitant to support the online access model.
Rina Tay, a regional director of a Singapore-based company, told ZDNet Asia the boxed version of Office still offered a better buy as it would be easier to reinstall the software should the personal computer crash.
"If you buy online, there is no [physical] disc and you may have a hard time trying to find your confirmation code, especially if you subscribed a long time back," Tay explained.