Microsoft – Days of Office.

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Office is by far Microsoft’s most valuable asset.

• Microsoft is systematically removing any reason for the rivals to Office to continue existing.
• Microsoft has announced that it has extended its partnership with Samsung, Pegatron, Dell and 9 others to ensure that its Office apps are installed at the factory on more devices than ever before.
• Installation at the factory is an important factor when it comes to the success of an app because:
  • 1) Very like being the default option, having the app present in the box it ensures that the user does not have to search for, download and install the app from an app store.
  • Although it is increasingly easy for the user to do this himself, most users will not bother and studies have shown time and again that usage of apps is much greater when they are pre-installed at the factory.
  • 2) Office apps can be quite processor intensive meaning that their performance can be an issue.
  • Agreeing with the manufacturer to preinstall the apps ensures that they are properly tested and that optimisations occur to ensure that performance is as good as it can be.
• Consequently, apps that are installed at the factory will often perform better and get used more than those that have to be downloaded.
• It is clear that Microsoft’s intention is to put its Office apps on every platform that can run them and to ensure that users are strongly incentivised to use them.
• The basic editing functions on the iOS and Android versions of Office can now be used by any user free of charge.
• Furthermore, Office 365 is both reasonably priced (at $2 month more than Spotify) and free for students globally.
• These changes mean that Microsoft has removed all of the reasons to use Google Docs, iWork, Libra Office and so on and as a result I think that they will cease to exist over time.
• The Microsoft Office clones exist because historically either one could not access Office functionality on certain platforms or the software was too expensive.
• In practice they are a reasonable approximation of the original but using them is painful when most of the rest of the world uses Office.
• No one has ever been in doubt that Office is superior to anything else out there it was just a question of access and price.
• Now that both of these barriers have been removed, I expect that the “Office clones” will wither and die over time.
• Even people high up in the Linux and Google camps will admit behind closed doors that this is likely to be the case.
• Office is rapidly becoming Microsoft’s most valuable asset and Microsoft is executing the right strategy in using it to bring users back into its ecosystem.
• The first step is to ensure that content creators only use Office but on whatever platform they choose.
• The second is to entice them back into the Microsoft ecosystem with a good marriage of Digital Work services and Digital Life services in a single user experience.
• Here Microsoft is making slow but steady progress.
• The one big hurdle that remains is how it markets its wares and tells its story.
• Marketing remains firmly locked in the old way of doing things and is the only part of Microsoft that has not meaningfully changed over the last year.
• If Microsoft begins to explain to users properly why they should be living their digital lives with Microsoft, then it has an excellent chance of really fulfilling its potential as the third ecosystem.
• Until that happens, Microsoft is likely to continue in not making the most of its assets and will remain a hostage to the PC market.
• Fortunately, none of this is priced into Microsoft’s stock making it safe to live in hope.