Why? Apple needed Microsoft Office on the Mac to make the platform viable and Microsoft complied with a $150-million investment and a guarantee to keep Office running on the Mac for five years. That was then and this is now and guess what? Microsoft needs Apple.
The Mobile Wars
In a nutshell, here’s how that original agreement with Microsoft worked out for both companies. Microsoft kept Office on the Mac and it’s still there. Microsoft made millions on the stock investment, too (and possibly kept regulators off their backs by helping to prop up a competitor to a monopoly).
What did Apple get? Time. Over the next few years Jobs kept Apple in the black (sometimes by selling off assets), trimmed the company to a lean and mean state, and started work on the next great thing.
By the end of 2001 Apple had launched a line of successful retail stores, righted the Mac to profitability, launched the iPod, and set the company on the road to immense prosperity as the mobile industry exploded; iTunes on Windows, Intel Macs, iPhone, iPad, App Stores.
What of Microsoft? In a modern day version of tortoise and hare, Microsoft fell asleep, lumbered through a decade or so of immense profits which were squandered in a vain attempt to diversify itself while ignoring the disruptive changes Apple wrought upon the industry.
As they say, what goes around comes around. Karma is a bitch. Microsoft’s presence in the burgeoning mobile industry is negligible; a mere rounding error in the smartphone and tablet industry. These days, it’s Microsoft that needs Apple.
From my perspective as a begrudging Office user, I find it remarkable that Microsoft has backed itself into a corner, and to counter that position has backed itself into the past– by putting Office everywhere. Office on Windows, of course, but Office and other apps are on iPhone, iPad, Mac, and even Android devices.
Microsoft’s hook is obvious. Office is free on mobile devices and users are given an option to use Office 365, the company’s subscription storage service. Subscribers get additional features and capability. Among mobile device users which group actually uses their devices more than any other? Mac, iPhone, and iPad owners. Microsoft needs Apple’s customers to help the company’s strategy to become a major cloud player (which is mostly what Office 365 is).
I’m tied into Office 365 at work, so I have Office pretty much everywhere– Mac, iPhone, iPad. Admittedly, Office, Notes, Outlook for iOS and Mac are decent applications. Office 365 seems to be stable and dependable (quite a contrast from iCloud) and Microsoft’s focus on creating software that customers want to use seems to be paying off. That doesn’t make me like Microsoft any more, but using Office on multiple devices all connecting to the cloud has certain advantages.
While I’ve been an Apple customer for more than 20 years, I’m exactly the kind of customer Microsoft wants and needs these days. What does Apple need from Microsoft? One could answer, ‘Nothing’ and be correct. Apple needs a healthy Microsoft to foster competition; to make Apple better tomorrow than it is today. Still, Microsoft needs Apple more than Apple needs Microsoft.