Microsoft balks at Apple's 30 percent iOS Office cut
Tuesday, December 11, 2012 @ 5:54pm
| Even as Microsoft and Apple spar over Microsoft's SkyDrive iOS app, the two companies are also at loggerheads over the future of the forthcoming iOS version of Microsoft's popular Office productivity suite. Reports have it that the two companies disagree over whether Apple should charge its standard 30 percent commission on Office 365 subscriptions that would be sold through Microsoft Office for iOS. Apple is said to be unwilling to negotiate a more lenient split for Microsoft, while the details of Microsoft's position remain unknown.
According to AllThingsD Apple seems unwilling to negotiate a different commission rate, even for a software giant such as Microsoft. Microsoft's Office suite, despite increasing competition from other options, remains the dominant productivity suite in the world, as well as a perennial cash generator for Redmond. Office 365, which Microsoft would sell as an in-app purchase, is a subscription product that extends the productivity suite over desktop, cloud, and mobile platforms. Conceivably, giving Apple a 30 percent cut of Office 365 originating on iOS devices could result in Microsoft continuing to pay a yearly commission on those subscriptions to Apple, even if the customer purchasing the subscription no longer accessed the service from an iOS device.
Bringing Office to Apple's iOS and Google's Android platform could serve to generate ongoing revenues for Microsoft in the new computing era, an era in which Microsoft has been struggling to catch up. The Redmond giant, though, would likely be reluctant to sacrifice 30 percent of the proceeds from Office subscriptions as a toll to enter Apple's platform.
Bringing Office to Apple's platform would likely only strengthen the position of iOS devices in the growing Bring-Your-Own-Device trend, as it would make them even more compatible with the standard enterprise productivity suite.
Apple, though, has reportedly been adhering to its developer license and unwilling to budge. As Apple controls the iOS platform, the company decides who can sell what on the most lucrative mobile operating system. AllThingsD's sources say that the disagreement over Apple's commission has bloomed into a considerable argument between the two companies, one with no immediate end apparent.