Microsoft's big test: Deciding what stays, what goes in touch-based Office

How Redmond shrinks Office to fit tablets and touch will determine how it competes with rivals, how it rakes in future revenue, say analysts

What Microsoft puts in its upcoming touch-based Office suite will be a huge test for the company, analysts said yesterday.

"There's really nothing out there in the mobile world that provides anything near the power of Office on the desktop," said Ross Rubin of Reticle Research in a Monday interview. "It will be a massive challenge to preserve even the majority of that functionality."

Microsoft has said it will release touch-enabled versions of the primary applications in Office -- Excel, Outlook, PowerPoint and Word -- but has provided no clues of what that suite will be like. Nor has it disclosed a timetable for the touch-based suite, although rumors have pegged a ship date in the first half of 2014.

"We are working on touch-first versions for our core apps in the Office suite, Outlook, Word, Excel, PowerPoint, and we will bring these apps to Windows devices, and also to other devices ... at a proper timetable," is the most that company executive Qi Lu, who leads the Applications and Services Group, has said publicly.

CEO Steve Ballmer, who will retire after the company appoints a new chief executive, has promised that the touch Office will come first to Windows 8.1 and only later to other platforms, including Apple's iPad.

The timing may be secret, but the chore Microsoft has in front of it is not: It's massive, as Rubin asserted.

Deciding what stays and what goes will be crucial to how customers perceive the touch Office, whether as a replacement, more or less, for the powerhouse desktop applications that are familiar to millions; as companion to the desktop; or as fit only for casual use and users.

"It will be challenging to translate much of the advanced functionality of Microsoft Office into touch apps," said Al Hilwa of IDC, echoing Rubin. "I think most of the focus is going to be on light editing such as might be done on a tablet, versus playing around with Excel filters or pivot tables, for example."

Mobile apps, like those envisioned for Office on tablets -- including Microsoft's own Surface 2 and Surface Pro 2 -- typically boast a scaled-down feature set compared to desktop counterparts. Microsoft will either have to ditch swaths of features or devise a user interface (UI) that can hide most functionality at first glance, but still give users a way to find tools when they're needed.

The Office "Ribbon" UI -- which debuted with Office 2007 to some disgruntlement -- may be one way the touch apps can mask complexity. "But the change to the ribbon [in Office 2007] is pretty small potatoes to what a mobile Office will have to accomplish," warned Rubin.

Analysts don't doubt Microsoft's development acumen, but they wonder what choices the company will make, and how that will translate into customer reception. The latter is important because Office is important, not only to businesses worldwide, but also to Microsoft's bottom line.

A stripped-down touch Office -- Hilwa's bet -- would be impossible to sell at the same price point as the full-fledged desktop version, even if there wasn't enormous downward pricing pressure in mobile overall. Paid mobile apps seem to be fading, largely replaced by the "freemium" model, where the app is free and developers earn revenue from in-app purchases for additional features or tools.

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