Microsoft on Monday said that customers had downloaded about 27 million copies of the Office for iPad apps in six weeks, a number one analyst called "promising" even as she noted that it lacked important contextual details.
"I think it's too early to know how much traction they're actually getting," said Melissa Webster, an analyst with IDC, in an interview. "The more interesting question is how much revenue [Microsoft] has generated from people who were motivated to sign up for Office 365."
Microsoft launched the apps on March 27 after years of speculation that waxed, waned and waxed again.
Julia White, a general manager in the Office group, cited the 27-million download figure during the keynote at TechEd 2014, a Microsoft conference that kicked off Monday in Houston.
"Looks like we have about 27 million downloads of these apps. Not bad," said White. As she demonstrated how IT departments can manage iPads with Intune, the screen showed that more than 12 million of those downloads were tagged to U.S. users.
Because there are four discrete apps in the Office for iPad line -- Word, Excel, PowerPoint and OneNote -- White's comment implied that the 27 million tally was of all apps, not the number of "sets" or the total number of customers who have one or more of the quartet on their iPads.
According to AppAnnie, Word was downloaded the most -- it typically was the highest of the four on the mobile app analytics vendor's most-downloaded list -- with Excel, PowerPoint and OneNote following, in that order.
Because of Microsoft's in-isolation download count, anything else, such as the number of Office for iPad users, was pure guesswork. If each customer downloaded an average of two of the four apps, for instance, Microsoft's figure would represent 13.5 million users. But bump up the average to three, and the user base slips to 9 million.
Apple has sold a total of 211.6 million iPads since the tablet's 2010 introduction. But because Office for iPad requires iOS 7 -- and that OS won't run on the original iPad -- a better number would be 182.8 million, which represents all devices sold from April 2011, the first full month after the debut of the iPad 2, through March 2014.
Using arbitrary apps-per-user averages of 3 and 2 would mean Office for iPad is on between 5% and 7% of all iPads. As an outlier, if each user downloaded just one of the apps, the percentage would jump to almost 15%.
Benedict Evans, an analyst with the venture capitalist firm Andreesen Horowitz, pegged Office's penetration in similar terms. "27m Office for iPad downloads: depending on how many people downloaded multiple apps, say 5-15% of the iPad base," Evans tweeted Monday.
But as Webster pointed out, the big question -- how much revenue those downloads have produced -- is murkier.
The 27 million can't be used to deduce the number of paying customers because the Office for iPad apps can be downloaded free of charge for viewing documents, spreadsheets and presentations. (Unlike Word, Excel or PowerPoint, the free OneNote app offers full functionality.) To activate advanced features -- including document creation and editing -- users must have a valid subscription to an Office 365 rent-not-buy plan.
Microsoft has given little insight into the success of Office 365, and none into what part Office for iPad may have played. Microsoft's most regularly-touted number has been the active subscriptions to Office 365 Home, the pricier of two consumer-grade plans.
Word for iPad has been downloaded the most of any of the suite's iOS apps, according to lists kept by trackers like AppAnnie.
In a conference call with Wall Street analysts several weeks ago, Microsoft said it had 4.4 million Office 365 Home subscribers on the rolls, an increase of 26% in three months. The company has not, however, updated that number since April; if it had, it might give some clues about Office for iPad's impact on subscriptions.
The 27 million downloads surely led to some new subscriptions. But how many?
"Remember, some people already have access to Office 365," said IDC's Webster, referring to consumers who had previously plunked down $100 for a year's subscription or employees at firms that have shifted from on-premises perpetual licenses to Office 365. Both user categories would have rights to Office for iPad, and thus reason to download one, more than one, or all the suite's apps.
On the other hand, if 10% of those who downloaded an average of two apps subsequently became new subscribers to Office 365 Home, Microsoft would have added 1.35 million subscribers. Five percent? That's 675,000 additions to the list. Similarly, if one assumed an average of three app downloads per user, Office 365 collected between 450,000 (5% of the total) and 900,000 new customers (10%).
Revenue? At $100 per user per year, and using the above assumptions, Microsoft would have put between $45 million and $135 million on the books annually. Or not.
That's because another unknown part of the revenue equation is what percentage of the Office for iPad-fueled new subscriptions went through Apple's App Store -- the Office apps offer in-app purchasing of Office 365 Home -- and thus what cut Cupertino received and what Redmond was forced to concede.
For example, if 900,000 new subscriptions were processed through the App Store, Apple would have kept $27 million of the $90 million total, leaving Microsoft with $63 million for the year.
Those numbers, or even ones significantly more aggressive, seem like little more than pocket change to Microsoft, which in the March quarter alone recorded $20.4 billion in revenue.
That's not the point, said Webster of IDC.
"The key is that Microsoft has a winning strategy with Office," said Webster, who ticked off the seamless integration of multiple moving parts, from Office 365 and OneDrive to SharePoint and Office Online, formerly called Office Web Apps. "In the coming years, the services Microsoft has, and the authoring tools in those services, are what's going to become increasingly important."
Even so, she wasn't about to wave the checkered flag.
"Office for iPad is promising, but let's see if [the apps] stay popular for another few months before we decide," Webster said.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is email@example.com.
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