So now Apple has made OS upgrades free, and more importantly, has made productivity software free. A grab bag of thoughts, none of this is fully formed into a thesis.
- Of course none of this is really free, it is buried in the price of your device. Just as Windows prices are generally paid by OEMs. I’m not sure the “free OS upgrade” is remarkable or transformational.
- Free productivity apps are more interesting, maybe. Lots of discussion about how this is a “shot across the bow” at Microsoft, despite the fact that Microsoft already made this move with the Surface. But it isn’t much of a shot across the bow. One, the iWork apps aren’t that great. I’ve never used Pages for more than a second because I don’t write memos or papers so I am not sure what it is for. Numbers feels clumsy on iOS and is incomprehensibly different from XL on OSX. Keynote is the best but has horrible interop with Powerpoint. If you are a Keynote-only user and never have to deal with an inbound PPT presentation, it is OK, but that is a pretty small corner of the market. So I’m not convinced any of this is going to affect Microsoft in the slightest.
- It will be interesting to see how Apple organizationally deals with free software. Already one gets the sense that working on OSX and iWork are not the cool things to be doing inside of Apple. Now OSX and iWork are just cost centers. That is a tough position inside an organization. When teams start to squabble about resources and priorities, a non-revenue cost center doesn’t have a lot of pull, it tends to become a backwater in an organization. Money and talent flows elsewhere.
- We used the phrase “market discipline” inside of Microsoft, I think Paul Maritz was the genesis of this phrase. Setting a price on your product, and having to actually close sales with customers, creates great market feedback and market discipline. It is relatively easy to know if you are making customers happy. You get tons of feedback from customers when something they paid for is not working to their expectations. With iWork in particular, where will the market discipline come from? Already these apps are not best of breed, how are they going to get there?
- For years, Microsoft had a cheap productivity suite available, Works. It was generally sold to PC OEMs and was free to users. It was a fine product. It was positioned as being good enough for home and student users, whereas business professionals would want to pay for Office. Guess how many people want to think of themselves as “not professional, I don’t need Office”?
UPDATE: I’ve had some great conversations with people about this post. David Sobeski raises some great points, in particular the importance of making updates free and automatic, anything less is a disservice to customers and a nightmare to manage. Mike Conte and @Natbro both raise the point that sometimes a cost center can be correctly managed and feel empowered, Mike raises the example of the Audi transmission team who feel like they are part of a winning team. All great points and food for thought.
So now Apple has made OS upgrades free, and more importantly, has made productivity software free. A grab bag of thoughts, none of this is fully formed into a thesis.