The world's largest software maker
) is set to launch a redesigned online version of its Office
software with touch controls, which users can access wherever
there is an Internet connection.
Microsoft is offering Office 2013 at a $100 annual
subscription which it has named 365 Home Premium. The idea is to
offer an option to use the software on multiple devices. In the
current market environment, where consumers are increasingly
using smartphones, tablets and PCs, a single subscription
catering to all is likely to go down well.
However, since the service is available only for up to five
Windows devices or
) Mac computers and does not consider Apple's iPhone and iPad or
devices running on
) Android, a sales pickup is likely to be slow. Particularly
since these devices are likely to remain a major chunk of the
market in the foreseeable future. According to IDC, the Android
OS accounted for 75% of 181.1 million smartphones shipped in the
third quarter of 2012.
Microsoft's Office 365 is a subscription-based cloud software
service. It was officially launched in 2011. The new Office comes
with the traditional word processing, spreadsheets and email
programs that can be purchased singly or in combination.
The data will be stored automatically in Microsoft's data
centers and can be accessed through several devices.
This is a radical move from its traditional approach of
installing the Office software on a single system for a one-time
payment to an online subscription service.
Microsoft's Office software is being deployed in the stores of
retailers such as
J. C. Penney Company Inc.
) and U.K.-based retailer Tesco.
As per research conducted by IDC, cloud-based services may
grow into a $100.0 billion market by 2016, representing a
compound annual growth rate (CAGR) of 26.0%. Cloud services are
expected to drive the growth in IT going forward, generating
41.0% of overall growth in IT by 2016. Thus, the strengthening of
Microsoft's position in the segment is encouraging as the PC
market is showing no signs of revival in the near future.
Microsoft reported revenue, excluding deferrals, of $21.46
billion in the second quarter of fiscal 2013, which was up 34.0%
sequentially and 2.7% from last year, in line with our estimates.
All except the Entertainment & Devices segment grew both
sequentially and from the year-ago quarter. Entertainment &
Devices were down year over year.
Microsoft has a Zacks Rank #3 (Hold).
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