• Newsletter Issue #748

    March 31st, 2014


    During the same week the nearly-forgotten iWorld/Macworld 2014 event was held in San Francisco, Microsoft’s CEO, Satya Nadella, announced the long-awaited Office for the iPad. This is supposed to be a really big deal, since it should, in theory, help cement the growing reputation of an iPad as a proper device for business.

    But I’ll have more to say on that subject in the next article.

    Meantime, on this week’s episode of The Tech Night Owl LIVE, CNET’s very own Cheapskate blogger, Rick Broida, explained why he ditched Office 2013 for Windows, and why he was forced to find an unofficial method online to remove the suite from his PC.

    Now you just might wonder why Rick hasn’t yet decided to take the ultimate plunge, which is to switch to a Mac. Being that he’s a “cheapskate,” however, he won’t pay extra for a Mac, and I didn’t brother to educate him about the advantages and the cost-effectiveness of even the cheapest model. I’ll leave that for another day.

    You’ll heard from cutting-edge commentator Daniel Eran Dilger, of Roughly Drafted Magazine and AppleInsider, who explained in exquisite detail why the media meme that the iPhone 5c is a huge failure is wrong. He also addressed what he perceives as the ongoing media bias against Apple.

    We also presented tech journalist Rob Pegoraro, a columnist for USA Today and Yahoo!, who talked about the release Office for the iPad, the ongoing issues of net neutrality, and why he doesn’t believe Sprint and T-Mobile will ever merge.

    On this week’s episode of our other radio show, The Paracast: Getting the goods on the cattle mutilation phenomenon, as Chris presents his long-time mentor/researcher/friend David Perkins. Perkins, who does not normally do any radio shows, was one of the first mutilation researchers back in the mid-1970s. He was Linda Howe’s cameraperson for the filming of A Strange Harvest in 1979 and wrote the foreword to several books from Chris. Are cattle mutilations caused by cultists, individual pranksters, or some alien entity? We’ll be focusing on Chris O’Brien’s book, “Stalking the Herd,” and you’ll hear about some of the classic cases, and the classic theories.

    Now Shipping! The Official Paracast T-Shirt! We’re taking orders direct from our new Official Paracast Store, where you can place your order and pay with a major credit card or PayPal. The shirts come in white, 100% cotton, and feature The Paracast logo on the front. The rear emblem states: “Separating Signal From Noise.” We’ve also added a huge selection of additional special custom-imprinted merchandise for fans of our show.


    It’s pretty obvious that Microsoft hasn’t exactly felt the love these days. Windows 8 is an unmitigated disaster, Windows Phone is an afterthought, and the Surface tablet has gone nowhere. Even worse, OEMs who are building PC note-books with touchscreens have reported less-than-stellar sales.

    Worldwide, PC sales are falling, and Microsoft doesn’t seem to have a workable scheme that will convince customers to buy new PCs, or just upgrade existing gear. It may indeed be the post-PC era, but Microsoft seems to be doing well enough with the Xbox gaming console after years of suffering multibillion dollar losses.

    With a new CEO, Microsoft has a golden opportunity to alter the playing field, and perhaps do something to help the company regain its luster, or at least the aura of invincibility. But it’s still hard to listen to the company’s corporate-speak and believe anything.

    Yet there may be a light at the end of the tunnel from a certain sometimes enemy with corporate headquarters in Cupertino, CA.

    For  months, Microsoft has been extolling the virtues of the Surface tablet as the only serious business tablet. How so? Well, because you get a bundled copy of Office, something that was then unavailable on an iPad. But this is just the standard desktop version of Office 2013, even on the Surface RT. Worse, it’s not really designed for touchscreens, or to even run efficiently in a resource limited environment. It’s just the same old bloated version you and I have come to know and often hate.

    Unfortunately for Microsoft, there were few takers. Worse, customers are not updating their PCs. Many are embracing tablets or even Macs.

    Now I don’t know if there was a specific eureka moment at Microsoft where the leadership came to their senses. But here we are, mere weeks after Nadella became CEO, and he’s using the company’s first major media event to, in large part, introduce Office for the iPad. All those claims of how the Surface was better because it, and only it, had Office, have gone by the wayside. Microsoft took the responsible move and went after the money, and clearly the money was on the iOS platform and hundreds of millions of iPad users.

    The announcement came and went quickly enough. Members of the media who attended the session had hands-on sessions with Office, and came away impressed. To get a copy, just download Word, Excel or PowerPoint from the App Store. They launch within seconds, even on an aging third generation iPad, and the interface is fast, fluid, and pretty intuitive. There’s even a pretty standard Help feature to get you over the rough spots.

    But it’s still essentially a 1.0 release. You can’t, for example, print documents without first shipping it off to a Mac or a PC to use their print features. When asked about the missing print feature, Microsoft reportedly announced that features would be added over time. In that respect, the situation somewhat resembles the complaints over the lost features in iWork. Apple promised that the feature set would be enhanced over time, and, so far at least, have kept that promise as some of the key lost features have already been restored.

    Having used Word since the 1980s, I had no problems taking the plunge. But if you hope it’s all free in the same fashion as Apple’s iWork, the answer is partly. If you want to actually create or edit documents, you have to subscribe to Office 365, Microsoft’s cloud-based system that includes the Office apps plus online storage and other stuff. The cheapest plan for regular people, Home Premium, costs $9.99 a month or $99.99 a year. It supports five Macs or PCs, plus five iPads or Windows tablets. A cheaper single-user plan is forthcoming, but it probably won’t be worth an estimated $30 annual savings.

    You can share your subscription with up to four other members of your household, and the deal includes 20GB OneDrive storage, and 60 minutes of Skype calling per month.

    These two extras actually begin to make sense. Getting 20GB extra storage from Apple’s iCloud is $40.00 per year (total 25GB). It still may not be a reasonable price if you just want to use Office on a single iPad, particularly since iWork, admittedly a lesser-powerered app suite, is now free. But as soon as you add a second user, things change and the price becomes a relative bargain.

    Remember, too, that the subscription includes ongoing updates for all users on your account. When the next version of Office ships for the Mac, and that’s expected later this year, it’s all part of the package. But Microsoft still has to convince Mac users disenchanted with Microsoft and Office that it’s a relevant purchase.

    Just as important, if successful, the arrival of Office makes the iPad all the more compelling for business. Apple already owns the business tablet market, but now potential competitors from Android, and even Microsoft, are going to find the going even rougher to get a foothold in the enterprise.

    For Microsoft, it’s already a winner. The free Office downloads were sitting at the top of the App Store charts as of this writing, and the paid subscriptions, for which Apple gets a 30% cut if you order within the apps themselves, put Office for the iPad among the top grossing apps on the platform.

    You may think that Microsoft would prefer to just sell you a Windows license, but compare an estimated $40 or $50 sale as part of a PC purchase every few years to $100 a year every year for the rest of your life. And that’s just for a home user. Even if Windows sales really tanked overnight, the consistent success of Office could keep Microsoft’s executives fat and rich for a long time.

    But Microsoft isn’t just depending on Office to deliver income from iOS and OS X users. As some of you know, Siri, in part, uses Bing as a backend for search queries. That means more cash in Microsoft’s pocket and less cash in Google’s. And neither Apple nor Microsoft are particularly enamored of Google, so this is very much an “enemy of my enemy is my friend” situation.

    But Microsoft and Apple, despite decades of rivalry, have worked together before. And now the growth of the mobile market, and Microsoft’s failure to gain traction, have put these two sometimes competitors in bed once again, and both companies benefit. Microsoft gets those Office 365 signups, Apple gets their cut plus more street cred in the business world.

    Now I suppose Microsoft might consider putting Office on Android, but the Android tablet market is heavily dominated by low-end, no-profit gear that is entirely unsuited to handling powerful productivity software.

    But going to Apple also brings yet another advantage. Support costs for Microsoft’s Mac software, flawed as these apps have been, is far less than on the Windows platform, and the slimmed down Office for the iPad should have even fewer issues. Consider the nagging problem that forced CNET Cheapskate columnist Rick Broida to remove all vestiges of Office 2013 from his PC as an all-too-common situation.

    In the end, it appears Microsoft has made a smart move for once. Apple CEO Tim Cook has already exchanged complimentary tweets with Nadella over the arrival of Office for the iPad. This so-far successful launch is, at the end of the day, potentially a huge profit source for both companies.


    So you have the peculiar situation of the iPhone 5c being branded a failure even as it turned up among the top three smartphones on major U.S. carrier sales charts. You then have the argument that OS X Mavericks, a free upgrade for tens of millions of Mac users with compatible hardware, hasn’t taken off as well as might be expected.

    But that’s also not true. According to a statistics released by Chitika, an online ad network, an estimated 40% of Macs are now running OS 10.9 Mavericks.  These new figures come just five months after the OS was released.

    At the same time, usage of 10.6 Snow Leopard is only eroding slowly, at 18% of the Mac user base. But before some of you suggest this is yet another Windows XP scenario in the making, bear in mind that a fair number of the Macs running Snow Leopard cannot upgrade to 10.9 because the hardware isn’t compatible. Add to that the need of some users to run PowerPC software, impossible under 10.7 and later because the Rosetta conversion utility was discontinued, and you can see where that user base will only drop slowly, mostly as older Macs are taken out of service.

    Compare that to recent reports that, as of February 2014, a mere 11% of PCs were running Windows 8, which came out in the fall of 2012. Worse, 30% of PC users were still using Windows XP, even though Microsoft is dropping support within days. And those numbers, from Net Applications, only cover PCs with access to the public Internet. Imagine all those ATMs running the embedded version of Windows XP as examples of computers that must be upgraded immediately.

    Mavericks also appears to have been a mostly successful launch. It took a couple of updates to eradicate most of the problems with Mail, which was an especially flawed release, particularly if you cared about Gmail or wanted accurate counts of unread messages.

    Of course, making an OS upgrade free has its advantages. In contrast, Microsoft has tried without much success to persuade PC users to get with the program and go with the Windows 8.1 upgrade, but it’s only free to Windows 8 users. For the rest, it’s a pretty expensive and not-very-compelling update, so I suspect that most of the people getting the new OS received it preloaded on a new PC.

    The real number that should frighten Microsoft is the number of people who are downgrading to Windows 7, an option still being offered by some PC makers. But even if Windows 8 and its successors continues to tank, by embracing other platforms and emphasizing online services and software, Microsoft may still be able to rescue itself from a debacle in the making.

    I’ve written about a Microsoft “Death Watch” on occasion. I don’t think that Office for the iPad, and the next Mac version of Office, can ultimately save the company, but the ongoing changes within Microsoft might just give the company a longer lease on life.

    Meantime, Apple strategy to give Mavericks away free has clearly paid off in moving a large number of Mac users to upgrade. That makes it easier for developers to support the latest and greatest OS features without having to worry about legacy users. Indeed, even the free Microsoft OneNote app for the Mac requires Mavericks.


    The Tech Night Owl Newsletter is a weekly information service of Making The Impossible, Inc.

    Publisher/Editor: Gene Steinberg
    Managing Editor: Grayson Steinberg
    Marketing and Public Relations: Barbara Kaplan
    Worldwide Licensing: Sharon Jarvis

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    4 Responses to “Newsletter Issue #748”

    1. DaveD says:

      Making Office for the iPad is a smart move from the current Microsoft CEO. A rather late move for Microsoft. As a long-time Mac user who has never bought or used Office for Mac, it would not be a purchase on a future iPad. I have never felt a need to use Office. If I ever do, the $100-a-year subscription would be a deal breaker.

      Besides using a MacBook Air running Mavericks, I have an old MacBook that is still on Snow Leopard. While the MacBook Air get a lot of use time, it does not have the vast storage. The MacBook holds gigabytes of iTunes media and still getting a fair share of use time. Its only upgrade path is to Lion. I do have a few PPC apps and can get by without them if I do the upgrade. However, Snow Leopard is a great OS X. With other web browsers, Firefox and Opera, continuing to support Snow Leopard and a MacBook that will run Java and Adobe Flash, it makes sense for me to leave things as they are.

    2. James says:

      Office for iPad is a smart move for Microsoft and especially smart for the new CEO Nadella, as Office for iPad’s success has definitely positioned him in a better light than previous CEO Steve Ballmer, who poo-pooed each release of Apple mobile products and refused to consider putting MS software on a rival’s product.

      One note regarding Rosetta. Rosetta was not a conversion utility, but an embedded service in OS X that dynamically translated PowerPC code to Intel code on the fly in real time.



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