Microsoft (NASD: MSFT) Launching Online Subscription Service for Office

Microsoft (NASD: MSFT) has, to date, avoided bringing its popular office suite to touch screen platforms. As consumer tastes are rapidly changing, there is a growing expectation by users to have access to these programs on their mobile devices, and as such, Microsoft is rapidly working on plans to capitalize on the opportunity.

In an attempt to extend a lucrative franchise beyond personal computers, the world’s biggest software maker is selling a retooled version of Office as an online subscription service to consumers for the first time. It’s a departure from Microsoft’s traditional approach of granting permission to install Office on solitary machines for a one-time fee. “This is a fundamental shift in our business that began a several years ago,” Microsoft CEO Steve Ballmer wrote in a blog post. The revamped Office boasts touch controls, just like the redesigned version of the Windows operating system that Microsoft Corp. released three months ago. The company, which is based in Redmond, Wash., is trying to ensure that its products retain their appeal at a time when people increasingly rely on mobile devices instead of personal computers.

Microsoft is promoting Office 2013 as a program tailored for use over the Internet. All information is automatically stored in Microsoft’s data centers, allowing for access to the same material on multiple devices. The content also can be stored on the hard drives of devices. But Microsoft still isn’t trying to get Office on the largest number of devices possible. Office 2013 doesn’t include an option that works on Apple Inc.’s iPhone and iPad or smartphones and tablet computers running the Android software made by Google Inc. That leaves out the majority of smartphones and tablets sold in the past two years.

Revenue in the Office division fell from the previous year during the three months ending in December, partly because many prospective buyers have been awaiting the latest version. Microsoft’s stock gained 10 cents Tuesday to close at $28.01. The shares are up by less than 1 percent since Microsoft released Windows 8 to great fanfare three months ago. Meanwhile, the benchmark Standard & Poor’s 500 index has climbed by about 7 percent.

The attempt to sell online Office subscription to consumers comes nearly seven years after Google unveiled its own Internet bundle of word processing, spreadsheet and email programs. Google gives away a basic version of those applications, and charges subscriptions for more sophisticated packages aimed primarily at small businesses.

Although Microsoft has been slow to change, their products remain highly popular for students and work settings alike. The firm must address their lack of presence on iPad and iPhone devices though sooner, rather than later, as more and more consumers flock to the platform each month leaving money on the table for the Redmond based tech giant.