Will Microsoft Put Office 2011 On The Mac App Store? Only If Apple Drops Their Cut

Microsoft is apparently ‘looking at’ the possibility of putting Office 2011 for Mac programs on the Mac App Store with a view to taking advantage of the software marketplace that Apple has introduced.  AllThingsDigital is reporting that Microsoft is considering the Mac App Store as an outlet for their software on Mac, especially since they introduced OneNote on to the iOS App Store last week.

Microsoft would only allow Office 2011 on the Mac App Store if it made sense to their business strategy.  While it would be a great opportunity for Mac users, should Microsoft give the go ahead for their applications to appear on the App Store, there is one big obstacle that would require a resolution.  The issue of Apple’s 30% revenue cut.

As far as resolutions to this matter go, there appears to be two options which would facilitate Microsoft appearing on the App Store.  The first is that Apple could remove or amend their condition that 30% of the sales cost be pushed to them.  The price of an Office 2011 package could not be increased to compensate Microsoft for this simply because nobody would buy it from the App Store.  Microsoft would also not be terribly happy about giving 30% of their revenue to Apple.

The second option is that Microsoft could make the individual programs of Office 2011 available as separate downloads on the App Store, perhaps adding a 20-25% premium to the charge, much in the same as Apple did with iWork.  This would at least ensure that Microsoft was not losing a great amount of revenue from the sales on the App Store and, being honest, they would sell a lot more copies if they made programs like Word and Excel available as separate downloads.

While Apple is perfectly entitled to their profits from programs sold on the App Store, it is within the power of either company to get Office 2011 on the Mac App Store.  Apple will also have to weigh up potential profits from Office 2011 against the fact that they are expected to launch iWork ’11 in the near future. Office 2011 is the competition and while it may be in the best interests of Apple consumers to see it on the Mac App Store, it may not be in the best interests of Apple.

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  • Mr. Bee

    I think the whole issue of the 30% is a complete red herring. It’s not even “profit” from Apple’s point of view, let alone a rip-off as many seem to believe. 30% is in fact a rather standard retail margin, if not a bit low. It would be almost the same cost to Microsoft to put stuff in the Mac App store as it would to put their products in any other retail environment.

    Bigger issues for Microsoft would be:

    1) No serial numbers allowed
    2) No tracking of users allowed
    3) No “authentication” allowed
    4) No giant integrated suites of Apps allowed

    The only way they will get in the store, is to provide “Lite” (or in other words sensibly designed and *not* bloated) versions of the Office products, and to provide them as separate downloads. They wouldn’t even have to be any more expensive than Apple’s iWork offerings, because Microsoft *already* gives away massive amounts of their Office products to students and so forth at sub $20.00 prices.

  • Joe

    This argument might make more sense if the cost of retail distribution weren’t closer to 50%. Microsoft would actually keep a larger portion of the selling price from the App Store than when selling it through retail.

  • Curmudgeon Geographer

    People who doubt MS would truly be interested in selling through the Mac App Store are missing two things.

    First, the sheer number of Mac owners who are still using ancient versions of Office. I’ve seen a good number Mac users reinstalling their Office V.x on an Intel Mac running Snow Leopard. *head asplode* Those are customers who Microsoft could be earning something from on an upgrade but aren’t.

    Second, the Mac App Store is going to be on *every* *single* new Mac and the full (MS Office-compatible) iWork suite is available through it for $20 per component ($60 total).

    Get MS Office on the Mac App Store, and even if Apple takes $45 of the $150 price, MS still walks away with $105 that was sitting in the bank accounts of their customers that might have gone towards iWork.

  • Snafu

    I doubt the Microsofts and Adobes and other heavyweights out there would want to cede to Apple their direct relationship with their clients, the same way most magazine publishers are getting cold feet about the iPad.

  • http://www.applebitch.com AppleBitch

    Thanks for the comment

    What evidence are you looking for? This is absolutely nothing to do with whether the 30% that Apple takes is fair or comparable to other retailers (which, in the case of MS Office, mark-DOWN from the RRP). It is illustrating the decisions that would have to be made in order to facilitate MS Office appearing on the App Store, which given the relationship between the two companies and the unique position that each is in, is a complicated issue. Other issues concerning mark up of software prices are outwith the scope of this article.

  • SlothropRedux

    Interesting opinion piece, but it is free of evidence. Here is an exercise for the author: Tell us what the “normal” markup is for retail sellers of MS Office products. Is it 1%? 25%? If you don’t know then estimate the typical markup based on evidence from other software/retailer sources. Give us evidence to show that Apple’s 30% take is somehow different than what retailers typically get. THEN explain the impact of that difference. Without evidence, this is hot air.