Google Takes On Microsoft For Productivity Dominance Of Apple’s Mobile Platform

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Earlier today Google released Docs and Sheets, two productivity applications for iOS. The unified apps work across iPhone and iPad devices.

The new apps are just picking up their first ratings and ranks. Docs has picked up 23 ratings thus far, securing a four-star rating. Sheets is also rated four stars, with a total of 11 ratings tallied. Docs is slightly more popular than Docs. Here is Docs’ performance so far today on iPhone:

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And Sheets:

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(All ranking data via App Annie.)

I think that Google’s productivity applications have had a decent, if not quite muscular, first day — considering that they are launching into markets in which both Apple and Microsoft vend products, and in which their parent doesn’t have a home-platform advantage. (TechCrunch did note this morning that for now, the new apps appear to be iOS only, but it’s probably reasonable to expect them to eventually make their way to Android, too.)

Microsoft has both an iPhone Office application, and recently released discrete Office apps for iPad, including Excel, Office and Word.

The Office for iPhone app (Microsoft Office Mobile) isn’t massively popular. Here’s today’s data:

Screen Shot 2014-04-30 at 3.09.37 PM

On iPad, however, the new Office apps have had a big run, hitting the top slot on iPad (Word) in the United States, and also picking up several more of the top five ranks in their first day on the market. Four days after launch, Word for iPad was the top-ranked iPad app in 120 countries, after having launched in a total of 135.

At that moment, Excel was top 5 in 125 countries, and PowerPoint top 5 in 126. Word slipped in the following weeks, but is again the top iPad app in the U.S.

So, what’s going on here, and what does it mean? Frankly, I think that the release of Office for iPad undercut the release of Google’s productivity apps. Also, Microsoft released its products with far more pomp, dragging their new CEO back down to San Francisco for the launch. It also released three apps instead of two, making more noise inherently.

But even given Google’s more modest launch, and later-to-market timing, we can’t chalk up more than a fraction of the popularity differential — at least thus far — to those factors. It appears that far more people wanted Office for iPad than iPad versions of Google’s Drive suite.

Why, is a decent question, especially given the simple fact that Microsoft’s Office for iPad product is mostly knee-capped if you are not an Office 365 subscriber, and there are only a few million of those on the consumer side. You have to answer this question for yourself, but some reasonable guesses would be the remaining brand strength of Office, the fact that people are in some cases content to merely view documents, or that they simply don’t know that any other tool can do it.

Does it really matter which third-party company manages to win more productivity market share on Apple’s platform? Yes.

This is not only about market share on iOS or short-term revenues for either Google or Microsoft. Instead, it’s an important front of the larger platform wars. Let’s return to our earlier synthesis of Box’s S-1 document:

The [pressure Box is under] is amplified by a host of competition, and declining per-gigabyte fees. This cuts at what Box can charge for a key part of its value proposition, as larger, better monied players like Google and Microsoft beat each about the ears. The dance that Google and Microsoft are playing is different from what Box offers, but here’s the new reality: Cloud storage without editing and collaboration tools is moot, as are editing and collaboration tools without cloud storage.

Precisely. So, as each company both wants to ensure that it is the place where it stores your files, as then it can up-sell you editing tools, it also wants you to use its editing tools, so that you become more dependent on its cloud storage offerings. This symbiotic tautology creates a positive per-account revenue updraft for either Google or Microsoft, thus locking in long-term cash flows that have insane gross margins. The stuff that empires are built on or, in this case, sustained on.

And does iOS matter more broadly for Google and Microsoft? You bet it does. Not only has Microsoft built a host of apps for it, but remember that earlier note about what Google built today for iOS perhaps landing on Android — its own platform — in the future? Right.

While Office for iPad had a more explosive start than Google’s new offerings have posted, this is a very long game. How long? Answer the following questions: How old is Office, and how long will cloud storage live? That long.