The anointment of new CEO Satya Nadella has renewed calls by analysts that Microsoft free its profitable Office franchise from Windows and release full-featured versions for Google's Android and Apple's iOS tablets.
"Nadella should focus on setting products free, making them available everywhere, such as making Office available not just on Windows but also the iPad," said Ted Schadler, an analyst at Forrester Research, in an interview earlier this week. "Set this business free, Satya."
Microsoft has said it will eventually ship some kind of Office apps for Apple's iPad, but has also pledged to do that only after it ships a touch-enabled edition for Windows.
Former CEO Steve Ballmer made that promise last October at a conference hosted by researcher Gartner. At the time he said, "iPad will be picked up when we do what I would call not just a touch-enabled, but a touch-first user interface [for Office]."
No release date yet
Neither Ballmer then, nor Microsoft since, has revealed a release date for the revamped touch-first Office on Windows, much less a timetable for offering something similar for the iPad and Android-powered tablets.
In 2013, long-time Microsoft watcher and ZDNet blogger Mary Jo Foley, citing an unnamed source, said the long-rumored, long-expected Office for the iPad would appear in 2014.
Even the composition of the touch-first Office for Windows -- presumably limited to Windows 8, Windows 8.1 and Windows RT -- hasn't been a topic Microsoft has bothered to discuss.
Some analysts' expectations are quite low, and anticipate little more than what Microsoft already offers in its browser-based Office Web Apps. Others hope to see considerably more features than the online editions, more like the desktop version. But few, if any, expect that Microsoft will try to duplicate the massive desktop applications on tablets.
Nadella has said nothing publicly about the future of Office since his promotion Tuesday, although during a staged interview on Microsoft's campus that day, he did promise that the company would broaden its IT management portfolio to include tools for handling non-Windows devices. He did not call out Apple or Google by name -- Microsoft, like most firms, rarely acknowledges specific rivals -- but he was clearly talking about Android and iOS.
"When we talk about our mobile strategy, it of course includes our own mobile devices, Surface and Windows Phone devices, from us and third-parties, as well as it's the identity and device management, and security, that we want to bring to every enterprise across all of their platforms," Nadella said, adding that that, at least, was non-negotiable.
But just as when Ballmer abruptly announced his retirement in August -- when calls for Office on iPad kicked back into gear -- Nadella's promotion again put the move at the top of some analysts' CEO to-do lists.
In a note to clients this week, Forrester elaborated on Schadler's call to Microsoft to release Office from its Windows-only penitentiary.
Forrester: It's time to move
"Rather than tell customers that they need to use Office on a Windows device to realize its full value, listen to the market and build Office to support the platforms your customers are using today," Forrester wrote in that note.
Its analysts argued that while the success of Windows in mobile is crucial to Microsoft, it could not afford to limit Office to that platform and leave potential revenue on the table. "When Microsoft released Office 2013 in October 2012, it strongly hinted that it would make the majority of Office applications available on iOS and Android in the first half of 2013," Forrester said. "It's now 2014 and we're still waiting."
Rival research company IDC also weighed in.
"Nearly 16 months after the launch of the touch-first Windows 8 operating system, Microsoft has still not shipped a version of Office designed to run in the operating system's Modern UI," said IDC. "Plus, it still hasn't shipped ... a version optimized for the Apple iPad."
As has been the case for months -- years even -- IDC and others believe that Microsoft has declined to sell Office on Android and iOS because the company's devices group sees the suite as a major selling point for its own Windows tablets. Wanting to retain that advantage, the Windows and device teams have blocked the move. Although the group responsible for Office has likely lobbied for a release sooner rather than later, claiming it can book impressive revenue, its arguments have been shot down.
Leaving money on the table?
IDC wasn't the first to call that strategy a failure, only the latest in a long string of similar criticisms. "It's a strategy that has simultaneously failed to drive adoption of these [Windows] devices and put at risk Office's dominance in the business productivity market," IDC contended. "The company is not only leaving a great deal of money on the table, but it's also forcing tablet users to find alternatives to Office."
While that implied push of customers to other choices, including Google's Apps for Business and Apple's now-free iWork suite, may not disrupt Office revenue in developed markets like the U.S., where the Word, Excel and PowerPoint productivity applications have a near-monopoly, IDC speculated that emerging markets would be different.
"[And] eventually these alternatives -- including free offerings from Google and Apple -- will be good enough, and Microsoft will have lost yet another important market," IDC said. "The new CEO has to consider how to move more aggressively to push Office to non-Windows platforms. Microsoft must come to terms with a new multi-platform world and leverage it to its advantage."
Nadella will have to decide when to ditch the current strategy of keeping Office locked into Windows on mobile -- there seems little chance that that will not happen -- and outsiders continued to urge him to pull the trigger soon.
"I would be surprised if the new CEO didn't want to proliferate Microsoft's apps on non-Windows platforms," said Melissa Webster of IDC, in a recent interview. "There certainly are other apps to edit content on your iPad, but people want to use the tools they're familiar with. I think the big question is how much they fit into a [touch-first] Office app."
Others warned Microsoft not to give the non-Windows mobile Office, or worse, the apps targeting Windows, short shrift. "Microsoft has said 'Windows first and best,'" said Wes Miller, an analyst with Directions on Microsoft, a small research company that tracks just Microsoft. "But it can't risk making Office elsewhere a second-class Office experience, as is Office on the Mac."
The most that Microsoft has done so far for owners of Android and iOS is to release skeletal smartphone versions of the primary Office apps for smartphones that are operational only for those who have subscribed to an Office 365 "rent-not-own" plan.
Office on mobile, then, is not only being used as a Windows carrot, but doing duty as the same for Office 365. Most analysts believe that even if Microsoft cuts the cord between Office and Windows, it won't do the same to the cords that bind Office on mobile to Office 365.
Miller, for one, believes that a more feature-laden Office on Android tablets and iPads will help Microsoft grow the subscription rolls of Office 365. But he warned that even then, Office 365 faces a long battle winning over enterprises, who have been mostly disinterested in the subscription concept.
At the same time, that means Office 365's biggest opportunities may be ahead of it.
"For a bigger organization to take advantage of Office 365 is very complicated. They've invested in Exchange, SharePoint and Lync, and there's a lot of heavy lifting to change," said Miller. "Many are still taking a wait-and-see position."
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