Microsoft's announcement today of a less expensive Office 365 subscription for consumers was the strongest hint yet that the company will soon offer an edition for Apple's iPad, an analyst said.
"It's an obvious preface for [Office on the iPad]," said Wes Miller of Directions on Microsoft, a Kirkland, Wash., research company that tracks only Microsoft.
Miller was referring to Office 365 Personal, a new SKU (stock keeping unit) that Microsoft said it will launch this spring. Unlike the current Office 365 Home Premium -- which will drop "Premium" from its moniker -- Personal will give buyers the right to install the Office suite on just one PC or Mac, not five.
But it was this line that caught Miller's eye.
"It's designed for an individual, allows for one PC or Mac and one tablet to be connected to the service," wrote Chris Schneider, a senior marketing manager with the Office team, on a blog today [emphasis added].
"I still feel that there will be a strong drumbeat of Office news in March, April, May and June, which is the end of [Microsoft's] fiscal year," said Miller, citing today's as an example. "The obvious play is to put the 'Modern' Office apps [for Windows 8.1] in front first, then behind that you can say, 'Oh, by the way, you can use Office on iPad.' "
Miller said he expected that Microsoft would reveal more of its Office plans, if not specifically in general terms, or make additional Office announcements at the company's Build Conference, scheduled to run April 2-4 in San Francisco.
Office 365 Personal will be priced at $69.99 annually or $6.99 monthly, a 30% discount from the $99.99 and $9.99 charges for Office 365 Home Premium.
By taking advantage of Home Premium's price umbrella, Microsoft also figures to pick up more subscribers. "Consumers are much more price sensitive than businesses, that's clear," said Miller. "That's the hole that this fills. There were certainly consumers who thought that $100 a year was too much, those who said, 'I don't have five computers, I'll be the only person who uses it.'"
The price could also spark fence sitters to jump for the pricier Home Premium. "That price also provides an incentive," Miller said. "I'll get [Home Premium] because it looks like a better deal, I'll get five computers for just $30 more."
Microsoft faces increased competition on the consumer productivity front from a number of players, ranging from up-and-comers like Evernote to long-time rivals like Apple, who don't charge for their software.
Last fall, Apple set free its iWork suite -- composed of Pages, Numbers and Keynote -- to buyers of new iPhones, iPads and Macs. Before that, the applications cost $20 each for the Mac versions and $10 each for those for the iPhone or iPad.
Some gauged the threat to one of Microsoft's most lucrative software franchises by listening to Microsoft itself: After Apple scratched off iWork's price tag, Frank Shaw, head of Microsoft's corporate communications, laid into the Cupertino, Calif., rival.
"When I see Apple drop the price of their struggling, lightweight productivity apps, I don't see a shot across our bow, I see an attempt to play catch-up," said Shaw last October.
A price cut to Office 365, even with an 80% reduction in the number of personal computers with rights to the service, could be seen as an answer to the free alternatives.
But more importantly, it's another day when Microsoft puts Office in the news, said Miller. "That's what they have to keep doing, talk about Office 365's new features and value to customers. If they don't [keep that up], it can lead to subscriber churn."
This article, Microsoft's new lower-priced Office 365 is 'obvious preface' for iPad suite, was originally published at Computerworld.com.
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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