Microsoft Corp. Chief Executive Officer Satya Nadella said he will “hold nothing back” to get the company’s programs across all devices, in a clear departure from the software maker’s longtime focus on its Windows operating system.
At his first public speech since taking the CEO job last month, Nadella introduced Office software for Apple Inc.’s iPad, the first time Microsoft is putting the popular productivity programs onto the tablet.
Nadella said the company’s goal is to get its Internet-based Office 365 service on any gadget, even if it reduces sales of Windows-based PCs or other products.
“It’s not a tradeoff, because it’s about going where customers are going,” Nadella said after the company event in San Francisco. “It’s not about today’s share position based on today’s form factors, because in the full arc of time there will be many new platforms that will require Office, from small screens to large screens.”
Nadella is presiding over Microsoft’s shift to a more open approach. While former CEO Steve Ballmer kept more of a focus on Windows, including pushing the operating system onto smartphones, Nadella is indicating that he proactively wants to get Microsoft software onto Apple’s iOS and Google Inc.’s Android-based gadgets. Because Apple and Android devices dominate in mobile, Microsoft risks having its software locked out if it can’t sell its programs for those platforms.
“There is a new sheriff in town,” Daniel Ives, an analyst at FBR Capital Markets & Co., wrote in a note about Nadella’s presentation. “We believe the Office for iPad was a major positive step in the right direction and signals a strategic change at Microsoft.”
Ives has the equivalent of a hold rating on the stock.
Microsoft shares fell 1 percent to $39.36 at the close in New York.
Office for iPad, which includes Word, PowerPoint and Excel, heralds a new business model for the software, which has been a paid product. Now users will be able to view their Office documents for free on their iPad, though to edit or make documents they will need to pay $99 a year for a subscription to Office 365.
Last year, Microsoft released paid versions of Office apps for the iPhone, which required a subscription to Office 365. That product cost $99.99 a year for a home version that works on five devices and $69.99 for a version that works for just one computer and one tablet.
“Microsoft is in the process of migrating the lion’s share of its business to the cloud and subscription,” Mark Moerdler, an analyst at Sanford C. Bernstein & Co., wrote in a note to clients last week.
Microsoft is taking a risk by asking people to pay $99 a year to edit, rather than just look at, their documents, said Milind Gadekar, CEO of CloudOn Inc., which makes a free mobile application that lets users access and edit their Office documents on mobile devices.
“Consumers expect editing to be free,” he said. “You have to find other advanced features to charge for.”