Boss office: In 10 years, every customer will subscribe

Microsoft CEO Steve Ballmer insists the software giant is really a company devices and services.

Today, the company is one of its biggest push yet to launch a subscription service for its franchise office consumers who are increasingly doing their computing on mobile gadgets and web applications. The software giant started Home Premium Office 365, the latest offering from the group of widely used productivity software.

The new service, which costs $ 99.99 per year, providing consumers access to receive the version of Word, Excel, PowerPoint, OneNote, Outlook, Publisher and Access. The license covers up to five devices and includes 20 gigabytes of storage service SkyDrive Web, as well as 60 minutes of free calls to mobiles and landlines around the world using Skype.

Kurt DelBene, president of Microsoft Office Division, acknowledges it will take years for all Microsoft customers to buy subscriptions. After all, many are satisfied with the version of Microsoft Office they already have on their PC. But he also believes that eventually, every customer will receive their applications through subscriptions because it is easier to manage, allows for automatic upgrades, and gives customers the flexibility to use the software on any device.

"We believe that in 10 years, almost all of our customers buy our software subscription," DelBene said.

Microsoft also faces growing competition from Google Apps, the software giant's research productivity based on the Web, and a variety of niche applications much smaller rivals.

CNET DelBene talked before today's launch. Below is a transcript of that conversation.

Question: Who do you think the type of main customers are the new product?
DelBene: I think families. You can use Office on up to five devices. So, if you think a family where parents and children use it, it's a bit obvious to the economy of these families. The other thing is that through both PC and Mac. So if you have a mixture of devices or computers in your home, it will also work.

The second thing I would say is (that) an area of ​​investment that has been very important for us is the consumerization of IT and how people work - the mixture of your life family and your professional life. So an investment that we have made, which is very central to the inspiration of the product from the beginning, it is cloud connected at all times. We expect that this means that people store all their documents in the cloud. With the subscription, we will triple the amount of cloud storage that you have to really realize the vision of mobile content (users) where they are.

We also made an investment in Skype and are very optimistic about the integration of this office. We match 60 minutes of the call (for help) Skype through your Office 365 subscription.

It is interesting that you mention the family. As a consumer with a family that I feel I'm getting closer to being "on subscriptioned." How can you convince families to decide that this is a good idea to separate a few hundred dollars a year for this? DelBene: We do not deliver to the paid version of the product, we also have the traditional version of the perpetual product. We want to give people the choice. We are optimistic about the subscription, but in no case is (this is essential) our company that we need everyone (the paid version).

In fact, we think that people will move to the subscription for the reasons I mentioned. But we want to offer people a choice one way or the other. It is, in a sense, is unique in the way we approach space. It is not only subscription. It is a matter of choice as well.

And how did you come up with the price? If I use this product over a year and a half is about the same as what the consumer pays for the older version of Office.

DelBene: We obviously do focus groups and talking to many customers. And it is partly informed by it. It is partially informed by looking at the prices we have for the products we have and how it relates to them. We also talk about our resellers and understand that price they think it will work. We therefore we have a very good value proposition to clients accordingly.

Another thing to consider is whether it is a year and a half (using the subscription of new Bureau) and is the same price, it's as if you do not use on a single device. Now think about the value if you use it on three, four, or five devices. While this is obviously great overall savings for the customer.

There have been many discussions over the years about the consumerization of IT and the people who bring their own equipment in the workplace, which requires departments to adjust and adapt. Increasingly, employees are bringing their own applications for the workplace as well. Seen with applications like Dropbox, YouSendIt and others. Essentially, they are bypassing do their jobs more effectively. Does this help or hinder Bureau phenomenon you are trying to get people to use this product both at home and at work?
DelBene: I think I would say it helps or at worst neutral for it. We made a big investment in our SkyDrive cloud storage is deeply embedded in Office. For example, if you open a document, you can open directly from SkyDrive, you can save directly to SkyDrive. Like where you were in the document when you left work to walk with you when you are at home. It will be a very strong asset for clients.

The second thing I would say is that it works just as well if someone chooses another storage backend (service). We can make a deeper integration, but it will not stop (service competitor) to work against, say, Dropbox storage. We will add more features deeper because we work with SkyDrive storage.

I would go back for a second, though. It is a challenge to think in a world where people bring their own devices and their storage and how they will handle it. And when companies register for Office 365 or they deploy SharePoint site, we provide SkyDrive Pro and we integrate directly into the desktop as well. And give them the flexibility of management and the ability to see which savings and access what. Integrated into the desktop, integrated services, and integrated into our products on site as well.

So it's a dilemma that IT must deal with how they are in that kind of world. We want to enable all the scenarios that users want, but we want to allow him to have a management strategy that works for them. Microsoft CEO Steve Ballmer talked a lot about Microsoft moving towards more of a services company and equipment. As you look forward towards the office, what are some other things that will appear as less as services and software that can be downloaded or delivered on a disk?
DelBene: Well, I think the new service delivery mechanism is an example of the type opens the way to what we can do in the future. The technology is new and different in the way we deliver the bits to the users. You can literally go to, click a button, and we will distribute the application on your desktop. So less you have to think like something that you install on the device compared to a service that you subscribe, and we support the necessary bits to give you the functionality you need.

So I think you'll find that becoming a pipe for us to offer new functionality and new features to users on an ongoing basis. You will see more cloud connectivity, the opportunity to go to a PC where you do not have Office before, but because you are a subscriber, you can download it when, perhaps, you are at home your parents . You download it, you use it and you walk.

With Office 365 Home Premium, what steps are you following will evaluate whether or not it is successful?
DelBene: I think the first thing is how it is embraced by customers in terms of what their feedback is. We actually had very positive feedback in terms of criticism preview client. And I think we made a good start ... But we will try to see how customers embrace the product and what their reaction is.

The second thing that I think we will look to sell the product overall. It is both the product perpetual and subscription proceeds. And is it healthy and growing for Microsoft?

The next thing we look at is the percentage of people choose to buy the product via subscription? And I think this will inform us about how we need to adjust the value proposition compared to perpetual product. If all goes well, we think it is great and we are going to build more of it. If there are obstacles to this, we will address them. And the great thing about a subscription is that you can adjust in real time and we can modify the product, delivery, and really enjoy the momentum after.

Do you have a goal for the percentage distribution of consumers paid version of Office on owning versus perpetual licenses after, say, 12 months?
DelBene: We believe that in 10 years, almost all of our customers will purchase our software via subscription.

OK, so there is a shorter time than you want to talk?
DelBene: It is not that we are actually against the targets. What we do is that we create the product that we believe will be successful. We look, we find gaps we twist. To be honest, I do not set goals between them. I think we will be a very strong start, based on what we've heard from retailers.
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