In an email interview earlier this month, Forrester analyst David Johnson summarized the challenge Microsoft faces in arriving so late to the game: "Microsoft's strategy of not delivering a useful Office product on iOS, ostensibly to preserve the Windows franchise (but also probably because it's a significant engineering effort) is limiting the freedom of consumers to choose the devices and operating systems that they want."
Johnson added that because natively using Office on a tablet demands embracing Windows 8 or Windows RT, many are simply exploring Office alternatives.
These alternatives pose a limited but significant threat. Office will remain the enterprise productivity standard for the foreseeable future, so a large user base is sure to greet an iPad-optimized version, whenever it arrives. But consumer adoption, and thus BYOD implications, could be another story.
[ What's in store for iOS and Android fans of Office? Read Microsoft's Office For iOS, Android Dilemma. ]
Apple is now offering free downloads of its iWork suite with the purchase of new iOS devices, for example, a move that is surely increasing the Office competitor's market share by leaps and bounds. Analysts told InformationWeek last month that although iWork isn't an Office-killer, it could still disrupt Microsoft's monopoly; documents might originate in the workplace via Word or Excel, but as soon as an employee wants to peruse or modify those documents at home, they could easily end up in iWork.
Make no mistake, Microsoft still stands to earn billions from the eventual release. But by waiting, it also might have left billions on the table. If the company had already released an iPad-optimized version of Office, its market position would likely be unassailable across all platforms, from mobile to desktop to the cloud. Revenue from mobile-friendly Office 365, already increasing at an impressive clip, might also be higher, which could in turn feed Windows Azure and other emerging profit streams. Microsoft might have been forgiven for leaving these opportunities untapped had its Office strategy motivated sales of Windows tablets -- but that hasn't yet been the case.
The alpha variable is how good Office on the iPad will be. As Johnson noted, creating a touch-oriented Office UI is a significant engineering challenge. Ballmer lightly alluded to as much at Gartner's event.
For all the radical interface changes in Windows 8, much of Microsoft's sales pitch has involved treating tablets more like laptops, rather than -- like Apple -- treating them as a distinct tool. Excluding the obvious difference in screen size, using Office on a Surface tablet is basically the same as using it on a desktop. Microsoft should be farther into the process than it is, but it's still encouraging to hear Ballmer emphasize the importance of creating a new interaction model.