Microsoft clearly made the right move when it released Office for the iPad instead of holding it as a bludgeon to get people to buy Windows tablets. That's the takeaway from Microsoft's announcement that there have been 27 million downloads of Office for the iPad since its release six weeks ago.
At TechEd 2014 Julia White, a general manager in the Office group, made the announcement about the 27 million downloads. Office for the iPad is composed of four separate apps -- Word, Excel, PowerPoint and OneNote -- and that 27 million figure includes the downloads of all of those apps. Word was the most popular download, followed by Excel, PowerPoint and OneNote.
Because people might have downloaded more than one app, it's tough to know the total market penetration, what percentage of people have downloaded at least one Office app to their iPad. Computerworld's Gregg Keizer, doing a back-of-the-envelope calculation, estimates it at between 5% to 7%, with an outside possibility of it going all the way to 15%. Benedict Evans, an analyst with the venture capitalist firm Andreesen Horowitz, tweeted a similar estimation of between 5% and 15%.
No figures are available about how many people have bought the subscription version of Office, Office 365, which you need to do if you want to use the Office apps for anything more than as readers. But even with a low percentage of downloaders signing up, it means big revenue for Microsoft. Office 365 sells for $100 a year or $10 per month. Depending on whether people buy Office 365 through the downloaded app or another means, Microsoft either gets all of the revenue, or 70% of it, with the other 30% going to Apple.
Either way, it will add up to substantial revenue and likely an ongoing revenue stream, because people will likely keep paying for their annual subscription. IDC analyst Melissa Webster told Computerworld that the initial short-term revenue isn't that important. More vital are the long-range benefits, notably the way that Office integrates with OneDrive, SharePoint and Office Online, which means that not only will Office 365 generate revenue for Office, but it will be an onramp to other Microsoft services as well.
This all means that Microsoft has a winning strategy in downplaying Windows and playing up Office and other services. Six weeks, 27 million downloads -- not a bad start.