Microsoft hopes free Office lures users

Microsoft MD Karan Bajwa sees a big opportunity among the country's Android users

Just two weeks ago, Vineet Durani, head of Windows at Microsoft India, made an almost prophetic statement: "We are the only company that thinks cross-platform." The conference room in the company's Gurgaon headquarters was rather freezing. His statement, too, seemed a little out of place. Only the coffee was comforting. "Knowing well that the world is getting hybrid and it (a Window application) should run on every device, (we) are thinking Microsoft on every device, rather than (wanting just) Windows on every device. I am the Windows guy and I am telling you this," he said.

Perhaps, he knew what was coming. Earlier this month, Microsoft announced that it was making its Office suite consisting of its popular applications - MS Word, Excel and PowerPoint- free for Apple and Android users. The move is the latest in a slew of announcements from a more aggressive Microsoft that is pulling out all stops to regain lost ground in the mobility space. This comes soon after recent decisions to make the Windows operating system free for all devices with displays smaller than nine inches, unlimited cloud storage, a tie-up with Dropbox, et cetera.
 

According to experts, the move will not only help Microsoft ward off attacks from competing services such as Google Docs but will also create some kind of stickiness for its products among consumers. It also syncs with the launch of Microsoft's newest operating system, Windows 10, which is expected to provide a seamless experience across platforms.

Jaideep Mehta, managing director of IDC South Asia, says that Microsoft seems to have understood that it needs to be more significant in the mobile space. "It is trailing Apple and Android in every significant market and it needs to change that." He adds that apart from propelling growth of its mobile software, the "freemium" service could drive revenues from ancillary services for the company.

"If it is giving the Office franchise - one of its biggest revenues earners - for free then it is meant to strengthen its monopoly on the desktop ecosystem. It will stop the march of applications by Google and others. Existing users will become stickier and new users will need to have it (Office) on their desktop as well if they have it on their mobile," Mehta adds.

So far, Word and Excel, created using Microsoft's proprietary software, could be accessed using free third-party software, while Microsoft's own cloud application was chargeable. In this scenario, some users started switching to services such as Google Documents which was over the cloud, seamless across PCs and mobiles and also free.

Sumanta Mukherjee, principal consultant at CyberMedia Research, says that Microsoft has realised that the consumer scenario will be different in the coming years with many users not needing a PC at all but going for a tablet or a larger smartphone instead. "It wants a piece of that pie."

The Office division may have accounted for nearly a third of Microsoft's revenue during its last financial year - about $26 billion out of the total $87 billion - but Mukherjee insists that by making it free (at least on the face of it), Microsoft will not lose much. The company was not gaining much in any case from consumer revenues. And whatever Microsoft will lose from consumers, it will be compensated from the enterprises, he says. Mukherjee expects that when the trend of 'Bring Your Own Device' becomes more prominent and young employees bring their own personalised devices to work, they will force the employer to stay on Microsoft Office 365 out of habit, resulting in companies paying for the experience and usage by most individuals.

Karan Bajwa, managing director of Microsoft India, recently told Business Standard that the company was not closed to the fact that there was a "large Android ecosystem" and it would do whatever it took to fight it. "Whether it's consumer interventions from a marketing standpoint or product offerings, we will continue doing these interventions. But we don't have our eyes closed to the fact that there is a very large Android ecosystem on the phone as well as on the tablet side. For us, I see it as an opportunity ." He added that there is a clear opportunity on the commercial side, where Microsoft traditionally has a strong Windows' engagement. "Building that value engagement from PCs to tablets is a natural consequence as more people start opting for tablets and phones."

So, is an Internet Explorer for Android and Apple in the works too? Wait and watch.