Software

Microsoft CEO Nadella Pulls the Trigger on Long-Gestating Office Apps for iPad


Microsoft CEO Satya Nadella

Photograph by David Paul Morris/Bloomberg

Microsoft CEO Satya Nadella

Fifty-two days into his tenure as Microsoft’s (MSFT) chief executive officer, Satya Nadella presided over his first public speech atop the company. He wisely decided against attempting to match his predecessor’s distinctive stage presence, but he was charming in his own way—making jokes about ordinal numbers, predicting the imminent future of ubiquitous computing, and promising the “magic coming-together of the cloud and mobile.” All of this prefaced the announcement of Word, Excel, and PowerPoint apps for the iPad, which had been conspicuously absent throughout the Steve Ballmer years.

A new version of Office software is the kind of announcement that’s hard to make sexy. Still, Microsoft did its best, showing off a bunch of features that were clearly designed for the tablet, including a custom numeric keyboard for Excel and a faux laser pointer for PowerPoint. The apps had been in the works for at least three years, says Ted Schadler, an analyst at Forrester Research (FORR) who saw earlier stages of development. “The timing is evidence that Nadella said let’s go, but he couldn’t say let’s go unless they had a product,” according to Schadler.

Read-only versions of the iPad apps are available for free. To create and edit documents, customers will need a subscription to Microsoft’s Office 365 software, which costs individual users $99 a year. By making the iPad app part of its wider software package, Microsoft avoids splitting revenue with Apple (AAPL), which takes a cut of the money that developers make through its App Store. Because the full versions are only offered as part of a wider package, it also means all those bosses who want their employees tapping out spreadsheets on their iPads while they wait in the airport will have to start ponying up for Office 365.

The iPad apps are part of a major shift in the way Microsoft does business. They also highlight how a company of this size is often working at cross purposes with itself. Microsoft has been slow to add Office to the apps in the iTunes Store partly to strengthen the value of its Windows operating system. Now, Surface tablets can’t snipe at iPads for their inability to run PowerPoint. “With Microsoft, it’s a delicate balancing act,” says Michael Silver, an analyst at Gartner (IT). “They have this big Office business, which, if they do it too well on other platforms, it hurts their big Windows business.”

Microsoft could hardly wait forever, although for years it seemed bent on trying. Competing programs such as Evernote, Dropbox, Quip, Slack, and Acompli have all been trying to take advantage of Microsoft’s absence from the iPad.

Nadella is getting a late start, but the idea of working from a tablet is still relatively new. Flurry, an app analytics firm, studied some 7,800 productivity apps and found that the time people are spending with such software is growing far more than in any other app category. This is largely because people don’t use productivity apps much at all right now—about five and a half minutes per day in the U.S., compared with 45 minutes on social networking apps, and 51 minutes playing games.

Brustein is a writer for Businessweek.com in New York.

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