Remember when people got excited about an Apple announcement?
Oct 24, 2013, 9:11 am
#46
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Whirlpool are moving From Lotus Notes for email and collaboration to Google Apps. In order to leverage Google Apps, you need to move both email and Office apps to Google's suite. I'm certain that Whirlpool, like most Fortune 500 companies had enterprise licenses for MS Office in addition to their Lotus Notes environment. This is how Google Enterprise makes their sell: ditch MS Office, ditch your email (notes or outlook)...Switch everything to Google for $50 a user a year. Moving only your Lotus Notes email doesn't make any sense.
So, Microsoft at this point has lost Whirlpool as an Office customer. IBM has lost Whirlpool for Lotus Notes.
Let me back this bus up to make sure I understand. So from my understanding the question was "how will MS compete (in the most broad sense) now that Apple has made upgrades of their OS free?". I believe my assertion was that they'll do just fine, since Office represents the majority of their income. So the argument was made that Office is dying and "evidence" of this was presented (and let's ignore that the article actually referred to loss of zero Office licenses). Now you're telling us that JCI, who obviously paid money for 180k upgrades, is equivalent to zero, and 30k users who are now using a different email client is equal to -30.
This is Voodoo math that the MPAA would be proud of. The question was how will MS make money if Apple gives away its OS. In the article you presented, MS earned money from 180k Office licenses, despite the fact that none of those 180k Office licenses represented a "new" Office customer.
I still think that answers the original question pretty clearly: They will continue to sell licenses for Office even though free options are available. Now if the original question were "How does MS plan to get NEW customers and grow their business" or even if it were "How does MS plan to stop users from switching from their cash cow to a much-less-functional and nonstandard yet free service" then maybe this might have been almost an argument. The original question was "How is Microsoft going to compete with free?", and I think the answer is still "because everybody's still buying Office and that in itself is still a rationale for everyone else to buy Office".
And just to briefly touch on the functionality aspect: sure, 80% of users may not use the advanced features of Office, but that doesn't mean that they aren't using them somehow. Few people here know how to use an excel macro, but every project here relies on at least two of them. And without them, a significant amount of change would be required just so people who don't know the difference between VLOOKUP and a Worksheet can continue to use the same tools they've been unknowingly using all along, even if they "don't use them". Now maybe this is just my experience, but I've also never subscribed to the "well most people don't need these, so you shouldn't need to have them either" attitude.
This is Voodoo math that the MPAA would be proud of. The question was how will MS make money if Apple gives away its OS. In the article you presented, MS earned money from 180k Office licenses, despite the fact that none of those 180k Office licenses represented a "new" Office customer.
I still think that answers the original question pretty clearly: They will continue to sell licenses for Office even though free options are available. Now if the original question were "How does MS plan to get NEW customers and grow their business" or even if it were "How does MS plan to stop users from switching from their cash cow to a much-less-functional and nonstandard yet free service" then maybe this might have been almost an argument. The original question was "How is Microsoft going to compete with free?", and I think the answer is still "because everybody's still buying Office and that in itself is still a rationale for everyone else to buy Office".
And just to briefly touch on the functionality aspect: sure, 80% of users may not use the advanced features of Office, but that doesn't mean that they aren't using them somehow. Few people here know how to use an excel macro, but every project here relies on at least two of them. And without them, a significant amount of change would be required just so people who don't know the difference between VLOOKUP and a Worksheet can continue to use the same tools they've been unknowingly using all along, even if they "don't use them". Now maybe this is just my experience, but I've also never subscribed to the "well most people don't need these, so you shouldn't need to have them either" attitude.
On the large business/corporate side, they have what is called and Enterprise Agreement or “EA.” The EA allows corporation to install MS Office on all of their computers and they pay Microsoft an annual fee that covers support, upgrades to the next release, and the flexibility not to manage licenses. You estimate the number of desktops that you have, and then you have a periodic “true up” where you reconcile your estimate with actual installed copies. What you pay is complicated, but it is based on the number of desktops you have and is segmented on the kind of work your users do.
Microsoft’s strategy these days is to move everyone to Office 365. They believe that an annual subscription based ‘pay as you go’ model puts them in a position to compete with Google’s $50 a user a year. It also makes the revenue curve flatter and makes it easier to communicate with Wall Street.
So, Whirlpool is gone. And JCI remains in the fold.
As I said before, Microsoft is getting it from both sides now. Google’s Chrome OS is free. There’s nothing to stop Whirlpool from moving their clients to Chromebooks. Apple is making their OS upgrades free. That applies pressure to the Windows side of the business.
Now Apple is making their $60 Office suite free for everyone. Individuals and corporate.
You made the assertion that there is no replacement for Excel. I'm coming back to you that for 80% of the users out there, Google's free products are perfectly adequate. Now Apple is letting users have their binary and cloud Office products for free. So why do I need to pay for Office again? maybe instead of paying for an EA, I'll just let my 20% of user that need Excel use Excel, and the other 80% can using something else?
My assertion remains the same. How does Microsoft complete with Free? They've been a company that survived on Windows licenses for the PC (now under pressure from Google and Apple, and on top of that PC sales are dropping every year) and Office licenses (they are losing users to Google, and now will be losing users to iWork)...
Last edited by skofarrell; Oct 24, 2013 at 11:10 am
Oct 24, 2013, 11:27 am
#48
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).
Oct 24, 2013, 12:16 pm
#49
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Apple has a business model wherein they take smaller market share and remain profitable by charging substantial premiums. At first glance those premiums seem exorbitant and unreasonable except that Apple has been so skilled at whipping up that frenzy, no matter how high the price tag or how un-substantive the change. It's the frenzy, the experience, the excitement that has let them get away with those margins. As goes the line outside the Apple store on release day, so go the margins.
Oct 24, 2013, 12:50 pm
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Ok - but still OT. Microsoft is no god and they have their own set of issues. Plenty of space to create a thread to discuss that. However, since the original question here is what happened to the frenzied Apple announcements of years past I'd like to talk about that.
Apple has a business model wherein they take smaller market share and remain profitable by charging substantial premiums. At first glance those premiums seem exorbitant and unreasonable except that Apple has been so skilled at whipping up that frenzy, no matter how high the price tag or how un-substantive the change. It's the frenzy, the experience, the excitement that has let them get away with those margins. As goes the line outside the Apple store on release day, so go the margins.
iPads and Iphones can be had these days for $0 (with contract) and $299 for an iPad 2...not a ton of margin there. But it is interesting the the US market always seems to go for the high end no matter what.
Oct 24, 2013, 1:58 pm
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Scott - I'm interested to hear your reaction to the Nokia announcements from Abu Dhabi (especially the 2520 tablet and the 1520 "phablet"):
http://www.youtube.com/watch?v=6eg8wBfAdPo
http://www.youtube.com/watch?v=nLhT56YjOto
http://www.youtube.com/watch?v=6eg8wBfAdPo
http://www.youtube.com/watch?v=nLhT56YjOto
Oct 24, 2013, 3:21 pm
#53
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I am actually. I'm all for the end of Microsoft Office as the "standard" in office apps. Big fan of Google Apps, and heard nothing but good things about what Apple has done.
Oct 24, 2013, 3:23 pm
#55
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There hasn't been anything truly new in their product lineup since the iPad. And that was 2010.
Oct 24, 2013, 9:45 pm
#56
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But WHY? What could Apple add to a TV that would make it better? And I don't mean the content part, I mean the actual panel and enclosure. Shipping and inventory of these things would be a nightmare.
It would be better to make a killer home entertainment box - Apple TV is awesome, but quite frankly, Roku kicks its butt. We still don't have apps on Apple TV, and I think those have been rumored since 2009. In the meantime, ny daughter can play Angry Birds on my $80 Roku with its motion sensing remote with wireless audio built into it.
It would be better to make a killer home entertainment box - Apple TV is awesome, but quite frankly, Roku kicks its butt. We still don't have apps on Apple TV, and I think those have been rumored since 2009. In the meantime, ny daughter can play Angry Birds on my $80 Roku with its motion sensing remote with wireless audio built into it.
I think the reason AppleTV is innovating slowly is that it is unlikely to become lucrative. TVs on the other hand are expensive enough for Apple to make the margin they need. So AppleTV suffers because it would "cannibalize" sales of the iTV.
Likely the iTV will come with a content model that will be extensible into the Apple ecosystem so content will be available on the iPad and other Apple devices. It is that content ecosystem that will differentiate iTV from competing products. Will iTV also be Apple's gaming platform?
But perhaps the most interesting question is how users will interact with the iTV. I can't see Apple being satisfied with a standard remote. I also can't see an iPad/iPhone/iPod being the control device. It could, but that just wouldn't be revolutionary enough.
Personally, I'm getting my new iPhone and one of the new iPads and I'm looking forward to the rumored 12" MacBook. This may not have been an "exciting" set of products, but it is a set of products that I am buying.
Oct 25, 2013, 7:34 am
#57
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iPod
iPod Shuffle
iPod Touch
iPhone
iMac (newest flat panel generation)
Macbook Air
Move to all Intel
Mac Mini
Apple TV
XServe
MacPro
Time Capsule
MobileMe
iPod Nano
iWork
iLife
Final Cut
Post iPad launch in 2010:
Magic Trackpad
Thunderbolt display
Round Mac Pro (I consider that to be new enough to consider for this)
iPad Air (really pushing the "new" factor here)
iPad Mini
If you look at the really new stuff, all they have done since 2010 is bring out a smaller iPad and a more expensive desktop. Sure, they added a lot of new features to existing products, but where is the new product line?
Oct 25, 2013, 7:39 am
#58
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15 hours of battery on a Mavericks/Haswell MacBook Air is incredible. My users are stoked about the iPad Air.
I'm ok with waiting for Apple to get something right vs the Samesung approach of throwing things against the wall to see what sticks.
Oct 25, 2013, 7:50 am
#59
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what about:
iTunes Match
iTunes Radio
iBooks/iBooks Author
and lets not forget the Earpod.
Oct 25, 2013, 8:05 am
#60
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iPod HiFi Boombox
U2 Special edition iPod
iPhone Bluetooth headset
iPod socks
Ping
ROKR