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Apple announced this week that it will make its iWork suite of productivity applications free on new OS X and iOS devices.
Microsoft recently released its Windows 8.1 update to Windows 8 for free, has begun to bundle its Office set of products with Windows RT, and now sells Office as a service through its Office 365 product. The overlap between the two companies’ strategies and current product lineups both impact their short-term revenues, and long-term software and hardware margins.
We’ll deal with operating systems first then productivity software, and we’ll approach the topics as numbered lists to allow for brevity of a sort and clarity. Surface and Surface 2 both include Office, the world’s most popular, most powerful productivity software for free and are priced below both the iPad 2 and iPad Air respectively. Apple also decided to make its iLife and iWork productivity suite free, another headache for Microsoft, which continues to generate significant revenues from its Office suite of products.
All the above illustrates that there is an incredible confluence of software, services, and devices in the market today, the three components coming together to support platforms and to attack other platforms.
We can synthesize by stating that Apple is certainly looking to lower the price that consumers are willing to pay for software.
The pressure of slipping software costs is already apparent in the Surface 2’s inclusion of Office. In 2008 I vowed that the only animation software I’d switch to, once I had to give up Macromedia Flash 8, would be Free software. 5 years have passed and there’s no viable Free vector animation software for me to switch to. Whether it’s a massive Synfig UI overhaul, or something new built from scratch, I need a good, Free vector animation program to switch to. I need vector animation software I can use in the years and decades to come, that can grow with the times, and allow the future access to the work I do today.
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Ephnic Movie Maker for Mac makes beautiful home movies with your favorite video clips, images & background music. Both companies moved to free updates to their operating systems at the same time, and that’s hardly coincidental. Still, saying that Apple is now providing free of charge something that Microsoft is selling is at best partially correct.
You could argue that the software really is being given away at no cost, and that the margins are all hardware-based, but when you sell a device that has both software and hardware, you can’t be so puritanical.
So, finally, to directly compare the cost of Windows 8.1 Pro – $199 – with the cost of the Mavericks upgrade is slightly asinine, though Apple’s choice to make its update free was certainly a good one that will delight its users.
However, Office for Mac sales, I suspect, are only a fraction of the Business division’s revenues, so the impact, for now, can’t be too large. All that adds up to the following: The danger that Apple is pushing for Microsoft is that it is lowering the cost of a software category from which Microsoft generates trucks full of cash.
Microsoft, however, provided that it has margins of any strength on the Surface 2, can recoup some of that lost software revenue, as Apple does. Synfig supposedly can do all sorts of wonderful things, but it’s simply not useable by anyone not actually developing the software. You are searching for an alternative to vector animation software like flash, yet for some reason so many people suggest you to use blender.
You are absolutely right about proprietary software, but, on the other hand, you are never certain if free software will be supported longer than Adobe Flash. Given the spate of recent updates to those platforms, the transformation of Office, and Apple’s tossed productivity gauntlet, the software space that two firms are fighting to control is worth looking into. Consumers will still pay for the operating system when they purchase an Apple computer, as the cost of developing OS X and its updates is implicit to the sticker price of the machines. But by offering its suite for free, Apple–of all companies–makes Microsoft look greedy for deciding this year to start charging for Office 365 on an annual subscription basis: $99 per year.


And as Microsoft sells Office at its highest margin to business customers that are nearly always running fleets of PCs, the change to free iWork on Mac isn’t material. It is reworking the Office suite to create new incomes, even as Apple subsumes its own productivity software into its hardware packages. Apple is therefore making its productivity software a component of its operating system, which it charges for in the same moment as its hardware. Blender is a 3D Animation software which is very different from vector animation software bost in the result you get and in the type of work you have to do. As Apple executive Eddy Cue snarked, “Others would have you pay a small fortune” to use their software. If Apple can, over time, acclimate customers into not paying for productivity software, it could undercut Microsoft’s ability to sell Office at the margins it has for so long. Its gross margins allow it to drive the marginal cost to consumers of its software products to a near uniform zero price point. Free iWork for iOS is something that will blunt Microsoft’s current edge when it comes to mobile productivity, to some extent. That said, I do trust that the problem is with the user interface, not the back end; existing Synfig could conceivably serve as a starting point for making some really good software I could actually use.
In a word, Ephnic Moive Maker for Mac is very easy to use yet powerful enough to edit your videos and share with the world. This is a larger problem than in the past for both firms, as their desktop operating systems are increasingly fusions of software and services. Free iWork could stunt sales of that Microsoft product, on Macs that are sold from yesterday on (current devices in the market, both OS X and iOS do not receive the free software, oddly). Meanwhile the world moves on, new file formats and codecs are developed, and whether my work is compatible with progress remains at the mercy of my software’s corporate overlords.



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