Papers please! Microsoft creates second-class citizens with Office iPhone app

Leaving Office 2013 perpetual license owners out in the cold is no way to win friends, says analyst

Microsoft erred when it decided that the new Office Mobile for iPhone would be available to Office 365 customers but not to those who purchased a traditional "perpetual" license to Office 2013, an analyst argued.

"It's a mistake," said Frank Gillett of Forrester Research in an interview last week. "Any one [with Office 2013] should be able to access the [Office Mobile] app."

Last Friday, Microsoft launched Office Mobile, a three-part app that lets iPhone owners view Word, Excel and PowerPoint documents, and make minor editing changes to existing files. Although free to download, Office Mobile only works when the user also subscribes to Office 365, or has an account to a subscription through his or her workplace.

But Microsoft customers who forgo a rent-not-buy Office 365 plan and instead purchase a perpetual license -- the kind that's paid for once and can be used as long as desired -- are out in the cold.

That's not a good way to push adoption of Office 2013, said Gillett, pointing out that both consumers and businesses buy perpetual licenses to the suite. In fact, although Microsoft has boasted of Office 365's rapid adoption pace -- last month it said the consumer-grade Office 365 Home Premium had reached 1 million subscribers -- most enterprise customers don't acquire Office via subscriptions, and instead rely on volume license agreements to stock workers' devices with the suite.

"They're continuing the artificial advantaging of one product over another to change customer behavior," Gillett said. "We think that's a major mistake."

By cutting perpetual licenses out of the loop, Microsoft's created two classes of Office 2013 users, those who have the suite courtesy of a subscription, and thus access to Office on their iPhones, and those who do not.

"It's hard enough to get customers to upgrade Office as it is," Gillett said, arguing that by denying Office Mobile to users of perpetually-licensed Office 2013, Microsoft alienates some of its customers.

While Microsoft is aggressively promoting Office 365 -- the Office Mobile move is just the latest -- it has promised to continue selling perpetual licenses to the suite for the foreseeable future.

Microsoft's preferred treatment for subscribers is part of its long-term strategy, which dangles carrots and brandishes sticks to prod customers into taking the rental road. Subscriptions give Microsoft a more regular revenue stream that theoretically won't require convincing users to upgrade every three years.

Customers who cancel an Office 365 subscription are left with crippled software on their desktop and notebook personal computers, effectively locking them into the plan. The longer they stick with a subscription, the less likely they are to cancel, because to do so means they must purchase perpetual licenses as replacements.

Bob O'Donnell, an analyst with IDC, wondered about the efficacy of Microsoft's strategy that gives Office 365 customers preferred treatment. "It will push some to move to Office 365, but the challenge is that customers are not crazy about [subscriptions]," said O'Donnell. "They're still tough for people to swallow."

This article, Papers please! Microsoft creates second-class citizens with Office iPhone app, was originally published at

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

See more by Gregg Keizer on

Read more about mobile apps in Computerworld's Mobile Apps Topic Center.

Join the PC World newsletter!

Error: Please check your email address.

Tags Microsoftiossoftwareoperating systemsForrester Researchmobile apps

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Gregg Keizer

Computerworld (US)
Show Comments


Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >


Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >


Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >


Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles


GGG Evaluation Team

Michael Hargreaves

Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Kathy Cassidy


First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni


For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell


The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi


The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?