Microsoft Office Provides a Devices and Services Model

2013 has been a huge year for Microsoft Office, with the firm's venerable office productivity solution establishing itself as the biggest and most lucrative business within Microsoft. And here's the kicker for those of you who aren't yet sold on the company's new strategy: The success of Office this year is the result of it firmly embracing—wait for it—both devices and services.

I wrote recently about how Amazon in many ways pioneered the devices and services strategy that Microsoft now champions, and how that firm in some ways is closer to Microsoft's models than are companies like Apple or Google. But while many still struggle to understand how a firm that once bet everything on Windows can survive and thrive in the post-PC/PC-plus era we're now in, you don't really have to look outside Microsoft at all. Office is doing it right now.

This is all the more amazing when you consider that the core business of Office, productivity, doesn't seem particularly dynamic. After all, a word processing document is a word processing document, and while it's reasonable to expect the software that creates such things to evolve over time, once it reaches a certain level of maturity, it's also reasonable to believe that room for improvement is limited. Amazingly, however, that's often not been the case.

There are historical examples of this, such as Microsoft's decision to create common toolbars across early Office applications so that users could move more easily between them and take their expertise in, say, Excel with them when they used PowerPoint for the first time. And there was of course Microsoft's controversial effort to modernize the office productivity user experience with the ribbon in Office 2007.

But it is in this devices and services world, I think, that Office is taking its boldest steps. And while Microsoft can't map everything it makes to the same model, what the teams responsible for Office are doing should be studied and adapted where possible all over Microsoft.

Microsoft has embraced the cloud by offering an amazing array of Office 365 subscriptions that span both consumers and businesses of all sizes. It has created mobile apps for all major platforms, not just its own, but also iOS (iPhone, iPod touch, and iPad) and Android (handsets and tablets). Office is available wherever and however you want it, or soon will be, on the web (Office Web Apps), on your PC or Mac (full Office), and on tablets ("touch" Office) and smartphones of all kinds (Office Mobile).

That's your devices and services strategy right there. But Office doesn't just get the technology right. They get virtually everything right. For example, with Office 365, Microsoft didn't port its CAL-based licensing model to the cloud, it instead created multi-use licenses that mirror the way people really work today. Even the low-cost Office 365 Home Premium subscription—which costs just $99 per year—lets a household share the full Office 2013 Professional Plus suite between up to five family members. Office 365 Small Business Premium provides five installs per user. (And both provide multiple installs of the mobile products, too.)

Such a thing was inconceivable just a few years ago. But today, no matter which platforms you use, there are multiple Office apps and services available, so you can get work done, wherever you are, whenever you wish.

What's also interesting about Office is how it has withstood so many competitive assaults over the years: From the days of WordPerfect and Lotus SmartSuite, to open-source solutions like OpenOffice, to web-based suites like Google Docs and mobile apps like QuickOffice and Apple iWork, no competing solution—free, cheap, or whatever—has made any dent in the dominance of Office at all.

This amazes me. But then it has always amazed me: I remember seeing Linux for the first time in the mid-1990s and wondering how Microsoft could possibly fend off free, open-source software. After all, I reasoned, a free office productivity suite that provided even 10 percent of Office's capabilities would be devastating to Microsoft. Nope. And while Apple much more recently got a lot of unnecessary press for freeing up its iWork apps on Mac OS X and iOS, what this episode really highlighted wasn't that Apple had Microsoft on the run, but that Apple was desperate. Even the loyal users of its own platforms aren't particularly interested in something that isn't Office.

Understanding how Microsoft was able to keep Office so valuable to both the company and its users for so many years—the first version of the suite arrived 23 years ago next week—should guide the company's approach to its other platforms. That's a complex topic, of course, but this recent embrace of devices and services is, I think, the right path for the future. And Office is now the standard bearer for the rest of Microsoft to follow.