Microsoft exec scoffs at talk that Apple's free iWork threatens Office

Microsoft's head of communications took shots today at Apple's decision to give away its iWork productivity software, calling the move "an attempt to catch up."

In a post to the Official Microsoft Blog, Frank Shaw countered what he said was misguided at best, reality-bending at worst, coverage by the media and blogosphere on Apple's giving away iWork to new Mac and iOS device buyers.

Apple made that announcement Tuesday during an 80-minute event in San Francisco, where executives touted new iPads, lower-priced MacBook Pros, and declared OS X Mavericks and the iWork apps would be free to segments of the Mac installed base.

"Seems like the RDF (Reality Distortion Field) typically generated by an Apple event has extended beyond Cupertino," Shaw wrote. "So let me try to clear some things up."

Shaw took exception to the conclusions by some pundits that the Apple maneuver was a shot at rival Microsoft, and that by throwing in iWork with a new Mac, iPhone or iPad, Microsoft's Office franchise, the Redmond, Wash. company's business model and its tablet strategy were threatened.

"When I see Apple drop the price of their struggling, lightweight productivity apps, I don't see a shot across our bow, I see an attempt to play catch-up," said Shaw.

But Patrick Moorhead, principal analyst with Moor Insights & Strategy, saw it as exactly that: A shot. "I don't know any other way to interpret that than to say Apple was going after Microsoft," said Moorhead.

The "that" Moorhead was talking about was the slide shown behind Eddy Cue, Apple's head of Internet software and services, yesterday just before Cue announced that iWork would be free for new device buyers. That slide displayed the logo of Office 365, Microsoft's software subscription service, and cited $99 as the annual price for Home Premium, the consumer SKU.

Shaw has lashed out at the press over reports or at bloggers over their interpretations of news before. In May, he decried negative coverage of Windows 8 in general, and the update then code-named Windows "Blue" in particular. He took special exception to news and news analysis stories that compared Blue's restoration of the Start button to Coca-Cola's "New Coke" disaster of nearly thirty years ago.

Windows Blue was later named Windows 8.1, the free update that launched last week.

More recently, Shaw called out the media over how it handled news of current Microsoft CEO Steve Ballmer's retirement announcement two months ago.

Unlike in May, today Shaw did not cite examples. But there were plenty to be had, ranging from the measured "Apple Drives Consumer Software Prices to Zero" on Techopinions to the over-the-top headline of "Apple's Plan to Destroy Microsoft" on The Street. Computerworld's blogger, Preston Gralla, also weighed in with his "Why Microsoft is Apple's new whipping boy."

Shaw did not call out the most obvious example, that of Apple CEO Tim Cook, who took his own swings at Microsoft yesterday at the iPad launch event.

"Our competition is different," said Cook. "They're confused. They chased after netbooks. Now they're trying to make tablets into PCs, and PCs into tablets. Who knows what they will do next? I can't answer that question. But what I can tell you is that we have a very clear direction and a very ambitious goal. We still believe deeply in this category [of traditional notebooks] and we're not slowing down on our innovation."

Although Cook did not breathe the name "Microsoft," he was clearly aiming his comments at the rival, in particular its Surface tablet strategy.

Them's fightin' words! That's how one analyst viewed the slide Apple put on the screen during its Tuesday announcement that its iWork suite would be free to new Mac and iPad buyers. (Image: Apple.)

Shaw struck back, trumpeting the second-generation Surface 2 tablet's price -- it replaced the struggling Windows RT-powered Surface RT of 2012 -- as lower than any full-sized iPad; and reminding customers that the tablet came with Office apps.

He also called out anyone who dared to compare Office with Apple's iWork suite, which is composed of Pages, Numbers and Keynote. Each app costs $20 on OS X, $10 on iOS, but will be free to new Mac, iPhone and iPad customers.

"It's not surprising that we see other folks now talking about how much 'work' you can get done on their devices," Shaw said. "Adding watered down productivity apps. Bolting on aftermarket input devices. All in an effort to convince people that their entertainment devices are really work machines.

Then he got down to iWork, swatting the suite with each sentence.

"Apple announced yesterday that they were dropping their fees on their 'iWork' suite of apps," said Shaw. "Now, since iWork has never gotten much traction, and was already priced like an afterthought, it's hardly that surprising or significant a move. And it doesn't change the fact that it's much harder to get work done on a device that lacks precision input and a desktop for true side-by-side multitasking."

The tit-for-tat between Apple and Microsoft wasn't new, nor unexpected, said Moorhead. "These are two iconic companies, so what they say does get attention even outside the technology media," he said.

More importantly, said Moorhead, contrary to Shaw's tone -- he was dismissive of any threat to either the Surface or Office, especially the latter, from the iPad and iWork -- by eliminating the price for its suite Apple does threaten to Microsoft.

"Microsoft might view iWork as light-weight, but it could certainly be looked at as a fine small business tool, and potentially medium-sized business [tool]," Moorhead argued. "So long term, Microsoft is threatened by Apple's declaration that OS upgrades and productivity software are free, or included in the purchase."

Moorhead cautioned Microsoft not to believe its supremacy in productivity was insurmountable, even in business. "It may not be an immediate change, but it's one of these things that further galvanizes the potential buyer into seeing software as free," Moorhead said. "History has been on Microsoft's side, but markets, as we've seen, can shift quickly. And this could be another one of those big shifts."

As have others before him -- and as he has done himself in the past -- Moorhead urged Microsoft to react, and quickly. "Instead of giving people a reason to try something else, Microsoft should go cross-platform with Office. Office should be out on the iPad and on Android as soon as they possibly can do it," Moorhead said. "The extra level of pull-through of Office hasn't been enough to sell the Surface, so they're not going to lose anything by doing that."

To Moorhead, Apple's strategy was clear. "Apple sees an opportunity to pull in people with its lifestyle and productivity applications," said Moorhead. "If it hurts Microsoft in the process, that's okay."

It's Microsoft's strategy that he wasn't clear about. "Microsoft charges tons of money for Office and Office 365," Moorhead said. "Can you imagine what it would be like if developers charged $10 or $20 for a smartphone app? Apple has simply reset the paradigm for apps."

Computerworld's Ken Mingis chats with Keith Shaw about today's Apple announcements, which include the iPad Air, iPad mini with Retina display and free operating system and productivity software for Mac users.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

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