Microsoft recently released a long-anticipated version of its Office suite for the Apple iPad, including stalwart business applications Word, Excel and PowerPoint. This represents a major break from the Microsoft of the past, which tightly coupled the Windows and Office products, effectively using one to help sell the other and achieve dominance on traditional PCs. Office on the iPad has been expected for nearly two years, so its release hasn't made many waves in technology circles, but I believe this represents a seismic shift in Microsoft's thinking on the mobile front.
RT's rocky debut
Microsoft's first major rethinking of its tablet strategy came in the guise of Windows RT, a version of its Windows 8 OS designed to run on lower-powered ARM processors, providing superior battery life and portability. The Achilles Heel of Windows RT was that it lost Window's major advantage: an ability to run the millions of Windows applications already in existence. Microsoft counterbalanced this negative somewhat by including the full Office suite on Windows RT, making for a reasonably compelling offering in early 2013 — bringing a familiar Windows interface, the full Office suite, and iPad-like battery life at prices below the market-leading iPad.
However, many of the advantages of RT quickly evaporated. A new generation of Intel processes could finally compete with ARM on battery life, and lower licensing costs delivered Windows tablets running "full fat" Windows 8 while maintaining speed and battery life, at similar prices to an RT-based tablet. As all but a handful of hardware manufacturers abandoned RT, its last remaining advantage was inclusion of the Office suite. Even this seemingly "free" license for Office was not without caveats, as it supposedly required the user to own an existing Office or Office 365 license to use the products commercially. While a fair number of home users would certainly benefit from Office, it's primarily a corporate product, especially on tablets.
A return to software?
Releasing a high-quality version of Office on the iPad may signal that Microsoft has effectively given up on Windows RT. On its release, RT provided the only effective means to run "real" Microsoft Office on a tablet device, and a major barrier to its release on other platforms was likely internal concern that Office on the iPad would cannibalize Windows RT sales. The fact that Microsoft released fairly capable versions of their Office software seems to indicate that the company plans on supporting Office on the iPad for the long-haul, and is indicative of a shift to a "Microsoft everywhere" strategy rather than a "Windows everywhere" push. Essentially Microsoft is returning to its multi-platform software roots, rather than making Windows a requirement to enter its playground.
Other indications of this shift are lowered licensing costs for most Windows products, especially in the consumer space, and a move away from Windows branding on other products like the Azure Cloud.
What does this mean for mobility?
This represents a major shift for Microsoft. Rather than focusing on selling licenses to its Office and Windows products, the company appears to be shifting toward a subscription model. An Office 365 subscription is the now the price of entry for Office on the iPad and is part of Microsoft's emphasis on buying Office as a subscription rather than a one-time purchase. When your focus shifts from selling software licenses to selling subscriptions, you need to be where the money is, and in the case of tablet computing in 2014, that's still the iPad.
The good news for enterprises is that this may be the first push toward multi-platform computing, a push that has seen some precedent in Microsoft's cloud offerings. Nokia's announcement of an Android phone seems to indicate that Microsoft is becoming less dogmatic about its products supporting Windows first and foremost, and other platforms as second-class citizens. The bad news is that not only is this a likely death knell for Windows RT, but may represent a long-term de-emphasis on Windows and traditional corporate desktop computing.
This might not be a bad bet by Microsoft as we move toward the next generation of computing. "Owning" the OS was once critical to dominating computing, but is becoming less relevant. Users are becoming more dependent on the services and applications they run, with their OS becoming a gateway to applications rather than a critical component of the computing experience. If a an enterprise or consumer is paying Microsoft a monthly fee for a variety of applications and services, who cares if the middleman to get to those services is Android, iOS, Linux, or Windows. I can't imagine that building and maintaining a complex desktop OS is as lucrative as it was in the 1990s, so shifting that burden to Apple and Google must look increasingly attractive. Regardless of where Microsoft's strategy lies, it seems to already be making major shifts to its core products, perhaps foreshadowing even more interesting changes ahead.
Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent over a decade providing strategy consulting services to Fortune 500 and 1000 companies. Patrick can be reached at email@example.com, and you can follow his blog at www.itbswatch.com. All opinions are his and may not represent those of his employer.