We’re seeing a very different Microsoft

Microsoft has been hogging the limelight in recent weeks.

Quarterly results in late October showed that commercial cloud revenue for Microsoft — which includes Office 365 and Azure — grew 128 percent year over year (see Microsoft’s Surface numbers detract from Office 365 and Azure success). Office 365 Home and Personal subscriptions were up to 7 million overall, a 25% growth over the previous quarter. Obviously, Microsoft is remaining competitive in its battle for productivity tools with Google and others.

Then this past week, a bombshell: Microsoft released Office apps for iOS — and soon Android — freely downloadable, without the requirement of an Office 365 account (see Microsoft releases Office apps for iPhone, no Office 365 required). This has been widely heralded as really smart strategy for Microsoft, and more specifically, an indication that Satya Nadella has undone the last of Steve Ballmer’s missteps in iOS land.

Note that the company has clarified that they will be offering prorated refunds for users that signed up for Office 365 Home or Personal subscriptions, although users must apply for them.

There many other places that users can create and edit Office documents, and making iOS and Android users use non-Microsoft tools makes no sense. The trick for Microsoft — now that it has accepted the principle that editing on mobile should be free: just a part of the ecosystem — will be to offer premium features to lure power users to sign up for paying cloud services. For example, premium features of the apps — like tracking and reviewing changes in Word, customizing Pivot Tables in Excel, and checking your speaker notes while you present in PowerPoint — as well as integration with OneDrive for Business or Dropbox for Business. This follows my belief that uploading and storing files will rapidly tend toward zero cost, and we’ll be left paying for connection to other people, and the features that enable that.

Yes, Microsoft also announced a new partnership with Dropbox last week — a busy week — allowing Office users to get at files in Dropbox (see Dropbox partners up with Microsoft). With 35 billion Office documents in Dropbox, Microsoft is wisely choosing to stay close to those files. Otherwise, Dropbox might develop competitive editors. Of course, they still might.

My read is that file sync-and-share is consolidating rapidly (see Sector Roadmap: file sync-and-share platforms, and Brad Garlinghouse steps down from Hightail: Consolidation in the file sync-and-share market), and this integration is a major blow to the remaining independent competitors. This partnership is a win for both parties, and for users.

So, a very different Microsoft: one that is willing to partner, willing to accept the new economics of mobile, and learning how to coax customers to its web services with premium features instead of absolutist tactics. Learning to play, not to fight.

The touch interface for Office is coming

Microsoft is still the dominant figure in the office/productivity tool sector, despite the efforts like Google Docs and Apple iCloud, and innovations like Box Notes and Quip (see Taking another look at Quip, the social editor). The company finally got their suite to the iPad (see Office comes to the iPad, at last), but the user experience has not been optimized for a touch platform, to say the least.
Recently, Paul Thurrott uncovered some screenshots of a leaked presentation of the rumored touch implementation. Here’s a few shots that give a sense of what will be possible when this rolls out, supposedly in the fall.
word-comments3-2 word-with-penmarks-2
In the following two screens, you can see that Microsoft is developing a scripting language, allowing the user to write via stylus ‘find image of saddles’, which leads to a Bing result.
excel-search-w-pen-2 excel-search-w-pen2-2 excel-w-penmarks-2
Implications of the Touch Interface
It looks to me that Microsoft may have a breakthrough release on its hands, and will be staying alive in this niche, especially if they become available on iPad and Android tablets. I hope Nadella has the good sense to open this up, and not build it just for Surface tablets running Windows.
There doesn’t seem to be any contextual communications *outside* of documents, but Thurrott said that indications in the depiction of Windows — the start screen — makes this presentation at least a year old, so we don’t really know what has been going on in the meantime. A whole lot of this may have changed, and new capabilities may be been developed.
There are also leaked screens of Outlook, Lync, and some other system tools, like a post-it note app.
They are setting a high bar for others.

More productivity connections for mobile

In his Weekly Update, Stowe Boyd, the Gigaom Research curator for social, looks at the implications as ‘Google buys Divide‘–a startup in which the company had previously invested. Divide provides security for documents on mobile devices, and has various integrations, such with Box, through Averail for Salesforce.com and Dropbox, through MobiSystems for the editing of Office Suite documents.

Dropbox makes Dennis Woodside its first COO

Dropbox has brought Dennis Woodside on board to serve as COO, a new position at the company, and becoming the No. 2 at the file sync-and-share leader, reporting to founder and CEO Drew Houston. Woodside was chief executive of Motorola, at Google, and prior to that was head of sales and marketing at Google.
Looks like Dropbox is continuing in its push to invade the enterprise through acquiring senior people, like Ross Piper from Salesforce and Matt Eccleston from VMware (see Dropbox hires Ross Piper from Salesforce to speed enterprise adoption, and Dropbox hires VMware chief architect Matt Eccleston).
The company has over 200 million customers, and recently raised $350 million on a $10 billion valuation (see Dropbox, now valued at $10B, raises $250M).
As I said after that raise, Dropbox is going to be setting its sights on what’s immediately adjacent to the files it helps users sync and share: office applications.

Stowe Boyd, Dropbox for Business is only the start: next, work management and office apps
But the big news is revealed in a discussion between Dropbox execs and Liz Gannes at AllThingsD:

Liz Gannes, Dropbox Adds Enterprise Tools
Dropbox had to spend a year rebuilding its products to add the new enterprise-class controls the company unveiled today. “We’d been nervous,” Houston said. “If we clear off your computer, we might remote wipe all your baby photos.”
Yet, there’s more work to be done. The new version of Dropbox doesn’t include employee collaboration tools. And that feature will be essential for fully taking on Google and Microsoft in the productivity space. “We understand exactly what we have to build next,” said business product head Ilya Fushman.

Well, well, well. This is going to be interesting. Productivity doesn’t necessarily stop with editing Word docs, but also tools to support working socially, task management, curation, and potentially more in-depth solutions. My bet is that they are planning a work management toolset — or planning to buy one — as well as office-replacement apps.

I am betting that this will be heating up, and adding continued pressure on Microsoft. This week Google announced a partnership with VMware to bring Windows apps to Chromebook (see The Office Wars intensify as Google brings Windows apps to Chromebook), and Dropbox will likely be bringing out competitors to Office apps later this year.

The Office Wars intensify as Google brings Windows apps to Chromebook

The most  recent dust-up between Google and Microsoft for the future of the desktop is a new partnership between Google and VMWare to allow Chromebook users — by bridging Chrome OS in the netbook to VMWare’s cloud services — to gain what they call Desktop-as-a-Service. The timing of the announcement is clearly intended to coincide with the near-term end-of-life of Windows XP.
As Google’s Director of Product Management for Chrome, Rajen Sheth, put it,

As the countdown to Windows XP end of life continues, deploying Chromebooks and taking advantage of a DaaS environment ensures that security vulnerabilities, application compatibility and migration budgets will be a thing of the past.
VMware Horizon DaaS enables customers to centralize other desktop environments and manage these as a cloud service. Initially available to customers as an on-premise service or by VMWare vCloud Service Provider Partners (VSPPs) offering DaaS in the cloud or within hybrid deployments. Users will be able to access their Windows applications, data and desktops using VMware’s Blast HTML5 technology to their Chromebook.
This technology is available now by bringing together VMware Horizon View 5.3 and Chromebooks as an on-premise service and will be available soon as an application that can be installed from the Chrome Web Store.

This is similar to the Amazon Workspaces offering for Kindle (see Amazon announces WorkSpaces, and shifts Kindle into business tool), and the OnLive Desktop for iPad (see Why the “PC” you buy in 3 years won’t be a PC).
So the trend here is toward a transition from Microsoft office (‘productivity’) apps formerly running on desktop PCs on Windows XP, 7, or (shudder) 8. Companies are stuck because they have

  1. large repositories of existing documents in these formats,
  2. elaborate workflows around producing documents using them,
  3. staff that are familiar or expert in their use,
  4. and no real alternative that has yet emerged to Word, Powerpoint, and Excel.

Yes, Google and Apple have viable alternatives to the office troika, by they are simply substitutes, not a redefinition of a new way of work with something other than Office documents. That may be coming, but it’s not here yet. And my bet is that the alternative will rise from the inconveniences of solutions like Google’s partnership with VMWare, or Amazon’s Workspaces.
Google and Apple have increased the pressure on Microsoft by making their alternative to Office tools free, but offering a corporation a way to scale up access to Windows apps on Chromebooks — which were 21% of Us commercial laptop sales in 2013 — is yet another flanking manoeuvre, undermining Microsoft’s Surface strategy: trying to sell Windows tablets by making sure they are the best place to work on Office documents.

Apple to buy Hollywood? Not a chance.

Could Apple spend its $100 billion in cash to create a virtual cable operator to compete with Comcast and the like? Sure. But it would have a really hard time offering a competitively priced service and building a profitable business out of it.

3 occasions when the pen is still mightier than the gadget

There is no shortage of collaboration and productivity tools to help you get more done, but just because so many cool new tools are available doesn’t mean the old standbys are completely obsolete. Is there still a place for pen and paper in our lives?

Astrid comes to iPhone so more people can get things done

Astrid, the web and mobile application that allows users to create to-do lists with social features, has finally debuted a version of its app for the iPhone.

The iOS(s AAPL) launch comes three months after Astrid raised an undisclosed amount of funding from Google Ventures and Nexus Venture Partners.

Astrid is already very popular on the Android platform on which it originated last year: The app has been downloaded more than 2.5 million times in the Android marketplace in the 15 months since it launched, having gained traction with a range of users from multi-tasking parents to power-using “life hacker” types. As we’ve written before, Astrid’s mobile app allows users to make to-do lists and share them with certain individuals or groups of people. Astrid lists can also be made entirely public, or completely private.

The app’s aim, Astrid co-founder Jon Paris says, is to help users get more things done through a healthy amount of social pressure. For example, my friends can give me a hard time if they see I haven’t gone to the gym this week like I planned to (a purely hypothetical situation, of course). Now that Astrid has crossed the iOS launch off its own to-do list, it will be interesting to see what the company does next.

Here are some screen shots of Astrid for iPhone (click to enlarge):


LinkedIn outbox like a broken record? Tout has an app for that

Many white-collar workers end up sending slight variations on the same email over and over again. Web application startup Tout has announced a new integration with LinkedIn that could be a major boon to a number of potential power users in fields like sales and PR.

Now backed by Google, Astrid is thinking big

Astrid is best known for making a popular web and mobile app that allows users to create to-do lists with social features. But with a new batch of funding from Google Ventures and others, the San Francisco-based startup has a much bigger picture in mind.