Apple's problems with SkyDrive might actually run Office deep

Apple/Microsoft SkyDrive fight may actually be about Office

There may be something bigger behind Apple and Microsoft’s argument over SkyDrive and in-app purchases than SkyDrive itself -- Office. Microsoft is reportedly trying to pressure Apple into cutting a special deal over Office 365 subscriptions. With Office for iOS still rumored to be coming next spring, and with Office 365 subscriptions rumored to be required to perform any real creative functions, there could be a considerable amount of money on the line for both companies. John Paczkowski of All Things D reports:

So [Microsoft] has been pushing Apple to adjust the 70/30 revenue split in its developer license agreement. Predictably, Apple has refused to comply. It’s not yet clear what sort of concession Microsoft is seeking, but whatever it is, Apple’s evidently not willing to consider it. Indeed, I’m told it’s taken a “the rules are the rules” stance, which would suggest it’s not at all willing to negotiate a different split. Apple’s position: If a customer comes through its gateway, it feels it is deserved the commission outlined in 11.12 of its developer license.

Now, it’s possible that it’s less straightforward than Microsoft wanting a lower rate. That’s undoubtedly true, yes, but in paying for Office 365 through their iTunes account, even if a user switched to a different platform such as Android or Windows Phone, unless they also changed their payment method, Apple would still take a 30% cut of the subscription revenue.

It would be understandable for Microsoft to be concerned about this. But Apple won’t create special rules for different companies, at least not any time soon. A similar arrangement already exists for other companies that provide subscriptions to their services through iTunes, including Netflix, Hulu, and Rdio. The best that Microsoft can do in that particular situation is heavily encourage users to change their payment method away from iTunes.

So it could come down to who needs Office on iOS more -- Apple or Microsoft?

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Joseph Keller

News Writer for Mobile Nations. Fascinated by the ways that technology connects us.

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Reader comments

Apple's problems with SkyDrive might actually run Office deep


"The best that Microsoft can do in that particular situation is heavily encourage users to change their payment method away from iTunes."

Why doesn't MS just do that?

They have. But Apple says you can't even put a link in your app. It has to go and MS needs to find a way to avoid even talking pmt in any iOS app if they don't want to pay Apple's fee.

That's not ideal for MS. Turnabout is fair play though. I'm sure they could make Apple surrender to them if Apple ever makes a paid Metro App. But like that will happen..

The difference is that microsoft isn't being such an extraordinary dick about payment platforms. Unlike with apple, you are allowed to use your OWN payment platform for subscriptions and such. The win8 store has an API to deal with such purchases and for most businesses (that aren't giants like apple, google, amazone etc) it would actually be cheaper to simply pay msft the 30%.

But anyhow, if apple would make a metro itunes for example, they would be able to use their own services for subscription payments - without having to pay msft.

A part of me is even wondering if msft isn't doing this on purpose just to expose apple as the greedy assholes that they are.

"Unlike with apple, you are allowed to use your OWN payment platform for subscriptions and such."

I just read about that & that's a great idea. For businesses that are big / capable enough to set up their own payment processing system, let them use it & charge nothing. For those that are not big / capable enough, they can use Apple's system & pay 30%. That's a great compromise.

<extending my middle finger to M$>

An internet based Office suite doesn't jive well with me. What if the internet is down? I guess I'll send the entire office home. Plus, they want me to pay extra to secure my sensitive docs? What the hell are these guys thinking?

"I got a great idea"
"Let's take the Google Docs idea to the next level and charge for it!"

"I got a great idea"
"Let's take the Google Docs idea to the next level and charge for it!"

AKA: Business?

There wouldn't be an iPhone without "Let's take XXX's idea to the next level and charge for it"

Apple can push whatever crap in house solution to Office they want, but the fact is business uses Office. If Apple wants that segment, they will need MS. Apple will blink and if they don't, they will pay the price.

Apple looks to be doing ok so far. Why would they blink now? If you do bend for MS, then that opens it up for others.

Here's the harsh truth, if MS wants access to those millions of iOS users, they'll have to compromise.

I don't think Apple wants that segment. The business sector is completely different and does not revolve around anything Apple makes. Apple focuses on ease of use, design/beauty, and build quality. If they wanted to compete in the business sector, they would have built their own office suite and database server, and mail app and exchange protocol, etc. Now I know they have iWork, but look at iWork, it is clearly not designed with the business in mind, but the student that needs to write a paper for school.

What is happening here, is that Apple made products that were so attractive, that business users themselves have wanted to own them. They manages to make the business users conscious of the ease of use and beauty of their products, even though it lacked all things business. Some businesses are so in love, that they are trying very hard to adapt to apple for their use cases. I know of companies that switched to mac, and run VMware for the office suite. They switched to apple for the same reason everyone else did, not for it's improved business features (since it lacks them). Microsoft saw that, and in effect, they are loosing grounds, so here they want to appeal back to those businesses that want the beauty of Apple, but are looking at ways to make it work with their business needs. If the trend continued, another 3rd party company could slip in, and come out with a suite of programs made for businesses that runs on Apple and competes with office, exchange, sql server, etc. This is why Microsoft must release it's Office apps on Apple products right now.

I've made $64,000 so far this year working online and I'm a full time student. Im using an online business opportunity I heard about and I've made such great money. It's really user friendly and I'm just so happy that I found out about it. Heres what I do, cloud68dotcom -

FACT:,Office is the world's most bloated software suite and everyone knows it, which is why most of us are still using MSO 2003 even on brand new PCs! Of all the PC software I could envision running on my my iPad, OFFICE is the least likely -- heck, even PHOTOSHOP was ported earlier! Truth is, Apple needs Office for the iPad ONLY because MS will release it for Android as well, and they couldn't bear the shame of ANDROID getting it first! Face it, my tablet-toting fellow fanboys: even Nexus 10 and iPad 4 lack the power and real estate to run Office For Grownups. Meantime Apple's own Keynote, Pages and Numbers run rings around their Office counterparts. Finally, most of the time I'll be in Evernote anyhow. When Office for iOS finally emerges, we'll all wince, pay our extortionate subscription fees --and then realize how much we don't need it,and how unsuited it is for mobile. In the years we've spent without Office, may of us have woken up to how much we never needed 80% of its features, and he easily and cheaply we can find the really useful core features elsewhere. Hope I'm wrong, but....

The problem with people who think like you is that you actually don't use the office features that are only found in office.

The true power of office lies in automation and extensibility. For many businesses, this makes office a must-have. I can't even count the amount of enterprises where I worked as a consultant where 80% of their business use cases was handled through macro-enabled office docs (word, excel, access).

For example, I'ld like to see you process a csv file with a couple of hundred thousand rows and dozens of columns, filter out the data that you need, merge it with word templated docs and have them automatically mailed through an access module with Google Docs (or whatever). And all that with only a few mouseclicks and a couple lines of VBA code.

And that's just one of millions of usage examples.
I deal with such things on a daily basis and I don't even want to think about having to do such things without Office automation to make my life easy.

It would basicly mean creating a program specifically for that use case. Which would take at least 5 times more work hours and which would drop maintanability to an all-time low.

Office is the standard in enterprise for a reason. And it's not because "microsoft forces the application on businesses". The enterprise market works very differently from the OEM consumer market. If an enterprise can't justify a specific cost, it won't be making it.

Agreed. At work I use office for the exact reasons you outlined, open office or google docs are great for a home user making a shopping list or writing a letter or doing a home budget, but they aren't designed to be able to handle a hundred thousand rows of data spread across several dozen columns. That is why you pay a premium for Office apps.


It comes as no surprise to me that whenever someone starts talking crap about "google docs vs office", most of the time you will find that to those people MS Office = typing a letter or adding a few numbers in excel.

The fact of the matter is that for most administrative departments that handle lots of data, office is saving them LOADS of money for development work.

This is why whenever I have a choice, I don't setup any payment for anything through iTunes for my iPad apps. It's disgusting to me that Apple who charged me a fair (sometimes way more than fair toward Apple's side of the deal) price for the hardware I bought also feels they deserve a cut of everything I do on it which is the fruit of anothers work. Why should I end up with a higher cost for everything I buy through apps on it? It is even worse when such deals could cause Apple to get paid, which means the customer charged, even when a customer has moved away from using the Apple Product.

I don't really plan on using Office 365 anytime soon, but it still irks something deep inside me that to own my iPad is to submit to all these things that increase costs for products to the consumer.

Microsofts best solution would be to have the account note if you setup through iTunes, and the moment you access from another operating system pop up a note that you could save on your fee if you switch your billing away from iTunes and include a link to the site to adjust that. Then, of course, also to offer those of us not using iTunes billing a savings over the iTunes price since we aren't incurring that 30 cent of every dollar tax on the purchases.

A main point that imore "conveniently" left out is that apple wants that 30% even if the end user leaves the Apple ecosystem. If someone buys their sub on itunes and a year later gets an android device, Apple continues to get that 30%. Ridiculous.

"... but in paying for Office 365 through their iTunes account, even if a user switched to a different platform such as Android or Windows Phone, unless they also changed their payment method, Apple would still take a 30% cut of the subscription revenue."
Seemed pretty "conveniently" stated to me.