Picture Microsoft in one of those V8 commercials, where the actor whacks himself in the head after he could be drinking a healthy vegetable drink rather than a can of diet cola.

Now, replace the veggie juice with an iPad and you might have a scenario playing out in the executive suite of Microsoft today.

Why? The software giant refuses to sell a version of its Office suite for the iPad, a mistake possibly costing $2.5 billion. One analyst believes the company is leaving $2.5 billion on the table by insisting to offer the popular software bundle to Microsoft’s tiny tablet market, as well as the declining number of PCs.

Can any company be that short-sighted? Wait, that was a rhetorical question…

Morgan Stanley analyst Adam Holt gets the $2.5 billion figure this way (via Fortune):

After selling less than 1 million tablets powered by Windows in 2012, Microsoft will be lucky to grab ten percent of the tablet market in 2013. Forget that Apple’s iPad dominates tablet sales, or that Hewlett-Packard is giving its PC partner the finger by picking Android instead of Windows 8 for its latest foray into mobile.

But wait, there’s more.

Holt estimates 30-40 percent of Mac users install the paid version of Office, compared to 10-15 percent of PC owners. If a similar 30 percent of the 200 million iPad owners in 2014 install the $60 version of Office, Microsoft could pocket an extra $2.5 billion, he reasons.

Office online on iPad

“Even for Microsoft, that’s a lot of money to ignore,” remarks TheLoop blog.

Even Holt says the “math is compelling” and could prompt the software maker to change course.

But we are talking about a Microsoft led by Steve Balmer, the person who in 2009 described the growth of Apple’s Safari and Google’s Chrome as a “rounding error.”

This is a company adamant on recouping the money lost from declining PC sales by charging way too much for the Surface – at least those consumers aren’t returning.

Wednesday, Microsoft execs said during a Goldman Sachs conference it was ready to match the iPad mini with a potential seven-inch Surface tablet, per BGR.

If Microsoft is deluded enough to think its Surface tablets are winning market share and PCs are still a viable platform in a mobile era (NPD disagrees), why shouldn’t the company also leave $2.5 billion on the table, right?

  • It’s their competitive advantage, to sell their own tablets, why give competitors the all advantage?

    • Its not about having the most selling tablet, it is about having the most money spued in a firehose towards their faces. Its not immoral, why the heck would they want to do anything if not that.

    • Andrew

      Not the same thing at all. OS X is an entire Operating System as where Office is a software. They already sell the Office Suite for Mac’s and OS X.
      This is a temporary stubbornness with their own tablet releasing. They’ll realize the err of their thinking sooner than later and eventually release an iOS version of Office.

      • You do know that an OS is just a massive software right? Software, big or small, is still software.

      • Andrew

        Yes, I know that. But just because they’re both written software does not make them comparable in the nature that he did.

      • don108

        A ton of fused metal, plastic, and glass is no different than a Ford or a Porsche, eh?

      • Welcome to two months ago. Either ways idiot, thats hardware not software.

      • EpicFacepalm

        Well, correction: It’s the same reason why Apple doesn’t release Safari, iWork, XCode etc. for 3rd party.

      • Jared Allister

        Safari is available on Windows, XCode is available to Developers on OS X, iOS, and Windows

      • EpicFacepalm

        OK, a crappy version of Safari (5.1.7) is available but you can run XCode on Windows only if you are using a virtual machine software something like VMWare. And no, there is no XCode for iOS (and how could it be?).

  • Ignacio Irigoyen

    I bet their resoning goes in the line of: “If people want office, they will have to get the my tablet, so instead of installing a one of the meany free alternative in Apples iOS market the users are going to throw away the iPad and get the Surface Tablet, yea!”

    • Jared Allister

      Well not having Office for iPad didn’t seam to stop companies schools and government all around the world from buying the Apple iPad over the Microsoft Surface RT&Pro. So it would benifit Microsoft more than Apple if they made a version of Office for iOS.

      • amsams

        buddy, how much data do you have showing schools/govt. chose iPad “over” the Surface tablet? are those data from 2 years before the Surface was ever released in the market?

      • don108

        Microsoft (i.e. Bonehead Ballmer) thinks that Office drives the market. That may be true to business, but not to the consumer, and that’s where the action is. Right now, MS’ approach is highly confused. They don’t know who their customers are, and they’re throwing anything they can think of against the wall to see what sticks.

    • Well oddly at my company now, we can use Pages, Numbers and Keynote. I was shocked, I did not expect this to happen any time soon. But now we can, quite amazing really.

  • I like Microsoft thinking cause it will kill them..corporate suicide isn’t fun but if they won’t “think different” then is their loss.

  • the same reason why apple don’t take a billion from selling Mac OSX to third party Pc maker’s, it’s same logique

    • CollegiateLad

      Nope. Licensing wins you market share not profit share. Apple’s earnings smash those of Microsoft despite not licensing OS X or iOS.

      It’s not the same logic.

    • I don’t think you can compare Office to OS X. It’s like comparing apples to oranges (no pun intended). Besides, Apple isn’t really in the business of selling software. They make money selling hardware. Apple would have 0 interest in licensing OS X. Microsoft however, is making most of its revenues from software sales, which is why it would be in its best interest to make Office for iPad.

      • Falk M.

        Most notably Microsoft makes more money nowadays via Office than it does with Windows…

        Well, go figure why they’d be stupid to ignore the iPad.
        And no, I won’t use a SaaS version of Office on iOS. Never.
        Give me a classic single license, not this subscription bullcrap, thankyouverymuch.

      • Guest

        “Besides Apple isn’t really in the business of selling software”

        So, what exactly are iWork, QuickTime Pro and OS X considered to be? Applewares instead of Softwares?

      • But that’s not their main business. The sales of all Apple software combined likely account for less than 1% of their total sales.

      • don108

        They’re means to sell lots of MacBooks, MacBook Pros, MacBook Airs, Mac Pros, iPads, iPhones, and iPod Touches. When they sell versions to Windows users it’s to show how good Apple products are.

      • Guest

        Same could be said about a Mac user buying a Windows, its to show you how good and flexible Microsoft products are.

      • EpicFacepalm

        Well, correction: It’s the same reason why Apple doesn’t release Safari, iWork, XCode etc. for 3rd party. Further correction, Apple is not a hardware company. More like a “design” company. For example, “Designed in California, Assembled in China”, or design the CPU, Screen etc. make foreigns manufacture outside the USA.

  • If you can’t win them , join with them!!

    • iDevizes

      Maybe you have to send that quote to Microsoft 😉 If the Surface doesn’t sell better, their MS Office software lose more share to other Office software solutions like Pages and Numbers. They with cut them self with this sort of actions i think.

  • They simply wanted Office to be an exclusive to the MS Surface tablets to be another reason for businesses or consumers to look into the surface.

    In a years time that surface wont gain significant traction we will hopefully see MS Office coming to iOS and Android.

    • Of course by then most people will alternative solutions that play well with their workflow so MS will simply loose market share in term of MS Office!

      I was using ms office on my mac till a year ago! But as soon as iCloud joined Pages and Numbers from iPad to the Mac I completely uninstalled MS Office and not looking back!

    • Jared Allister

      Not having office on the iPad hasn’t done anything to boost Surface sales and slow iPad sales

      • true, obviously MS simply thinks it will! There is no other reason for not getting office in iOS or Android!!!

      • don108

        @Paris Paraskeva: +1

  • surface is dead..

  • Microsoft feels they have a product they can actually take head to head with the iPad in a few years. They’re not interested in helping move their software to the competition, and that’s what it is; a competition. It’s not about leaving money on the table, it’s about putting more in the pocket.

    Seems pretty obvious to me..

    • Jared Allister

      If the Surface actually competed with the iPad, but it doesn’t, because the iPad sells and the Surface not as well. Microsoft t is a software company, it in their DNA, they are not a hardware company. When they make hardware, all they accomplish is to piss off their hardware partners who Microsoft need to buy their software. So their are not putting money in their pockets, their taking it from their partners and wasting it on marketing that never works. May I remind you that the only peace of successful hardware to come from Microsoft is the Xbox and their still 7 billion dollars in the hole on that from the billions of dollars they put into marketing it when it first launched!

      • EpicFacepalm

        You talk like Surface is the only Windows 8 Tablet available right now.

  • Paul Thurrott and many other Microsoft watchers have stated that Microsoft is developing Office for the iPad, probably using a subscription model. Frankly, if the version they delivered with Windows RT is any Indication, there is still work to be done. It has the functionality, but is not adapted well to the touch interface, many of the controls are too small, even when you switch to the UI choice which is better designed for touch. Having it work well on a smaller tablet will be even more difficult.

  • Its their property, so they can do with it want they want. Just as Apple elects not to license Mac OS X, Microsoft can do likewise.

    • don108

      No one’s debating that. The question is, are they acting wisely. The short term outlookers, such as the author of this article, are saying “No.” MS could make billions by selling Office to iOS and Android markets. Long term outlookers think that Office is so popular, by limiting its availability to Windows 8 is will drive people to Windows 8 (RT and Pro) products, especially their Surface. It hasn’t, which is why they’re scrambling to create “Windows 8 Blue” or something like that.

  • Raffael Erhart

    Microsoft Office is crap and will disappear eventually anyway.