Microsoft chief executive Satya Nadella has taken the wraps off an Office software suite designed for Apple's iPad, a widely anticipated move that underscores his willingness to point the lumbering software giant in a new direction.
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Microsoft unveils Office app for iPad
In an effort to expand to other devices, Microsoft announces new Office app for iPad.
Executives on Thursday (Friday morning Australian time) demonstrated a new "touch-first" version of Office crafted for the iPad, available for download as a free app, though a subscription is needed to let users create or edit documents.
Significantly, they did not demonstrate any software on Windows machines, signalling a departure from former CEO Steve Ballmer's focus on the company's own devices.
The Surface, one of Ballmer's prized concepts, was conspicuously missing from a show floor that included Android tablets from Samsung and Acer as well as iPads. Nadella did not mention the poor-selling tablet at all.
"Their absence speaks volumes," said Daniel Ives, an analyst at FBR Capital Markets. "Nadella's a cloud-centric guy; he's going to focus on what's been successful, and where the future's going. Windows 8 thus far has been extremely underwhelming."
Nadella kicked off the presentation with a fluid, low-key introduction to Microsoft's approach to the new mobile, cloud-centric world of computing, in his first public appearance since taking the helm 52 days ago.
Dressed in black polo shirt and dark jeans, the 46-year-old computer scientist threw in some geek humour and lines of poetry from T.S. Eliot, marking a change in style from his energetic predecessor Steve Ballmer. His lack of references to Windows indicated a deeper strategic shift.
"The Windows strategy, there's no change, except we want to be known as the innovative company that's coming from behind in some categories," Nadella said.
"If you look at the story of Windows, we lead in some, we have fallen behind in some. We're grounded in that reality. What we need to be is a challenger there and be able to show what we're capable of doing in these new form factors."
Microsoft's Office 365 Home Premium, designed for home consumers, costs $119 a year. For businesses it starts from $7.90 per user, per month. Users will need an Office 365 subscription to create documents with the iPad app.
Microsoft Office Mobile – previously available on iPhones and Android phones with an Office 365 subscription – is now free.
"We're excited that Office is coming to iPad – now part of the more than 500,000 apps designed specifically for iPad," said Apple spokeswoman Trudy Miller.
Sources have said an iPad-friendly version of Office – which encompasses such popular applications as Word, Excel and PowerPoint – had been ready for years, but the company had been reluctant to compromise its signature PC operating system. At the time, the sources could not speak because they were not authorised to talk to the media.
While the technology behind the software is not ground-breaking, the strategy is: it puts Office at the heart of the company's push to become a leading services company across a variety of platforms – possibly at the expense of Windows and its own Surface tablet.
Nadella's willingness to break with the Windows tradition, which remains co-founder Bill Gates' most enduring legacy, helped spur Microsoft shares to $US40-plus levels not seen since the dotcom boom of 2000.
Wall Street is now guardedly optimistic on a company that, while still garnering billions of dollars in annual profit, risks gradual obsolescence in a mobile-powered tech industry.
Analysts have estimated that Microsoft could rake in anywhere between $US840 million to $US6.7 billion a year in revenue from an iPad-native Office.
To some investors, steering a new course for such a massive entity – Microsoft is the second-largest US tech company by market value – is a daunting task. Before Nadella's appointment, some investors had hoped for an outsider open to change to take the reins.
But bold moves with Office, and signifying a renewed drive to conquer the mobile arena and cloud computing after years of shackling its best products to PC-centric Windows, are seen as a promising start.
"He talks the talk," said Ives at FBR, referring to Nadella. "Now the big question is, will he walk the walk?"