How Apple Inc. (AAPL) and Google Inc (GOOG) Are Killing Microsoft Corporation (MSFT)

Office under attack
On September 10, when Apple Inc. (NASDAQ:AAPL) presented its new iPhone 5S and iPhone 5C, Tim Cook also announced that the company will be making its iWork productivity suite freely available to all buyers of a new iPhone or iPad.

The company has also recently launched a beta version of iWork in the cloud which can be used for free on any PC through a browser. Apple Inc. (NASDAQ:AAPL) still charges for the Mac version of its iWork suite, but it makes sense to assume it will also be free once the free web version becomes mainstream.

Google Inc (NASDAQ:GOOG)’s cloud-based productivity suite, Google Drive, is freely available for iOS and Android mobile devices as well as PCs.

iWork and Google Drive may be limited substitutes for Microsoft Corporation (NASDAQ:MSFT) Office, but they will likely become better over time, and they are free. Even if they won’t completely replace Office in the midterm, they do pose a considerable threat, especially when it comes to consumers with basic productivity needs.

Bottom line
Google Inc (NASDAQ:GOOG) makes Android and Google Drive available for free with the intention of creating a huge platform and monetizing it via advertising in the long term. Apple Inc. (NASDAQ:AAPL), on the other hand, integrates iOS into its own hardware to build a single high quality product, and the free iWorks suite is intended at attracting more customers to the platform and selling more devices.

Microsoft’s Windows and Office as stand-alone software products are under heavy pressure from both competitors, and major industry trends like mobile and cloud computing represent a serious challenge to the company and its business model.

Microsoft Corporation (NASDAQ:MSFT) recognizes the threat, hence the change in CEO and the acquisition Nokia’s smartphone business. Acknowledging the problem is a good first step, but it’s hardly enough to guarantee a successful transition.

The article How Apple and Google Are Killing Microsoft originally appeared on and is written by Andres Cardenal.

Andres Cardenal owns shares of Apple and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft.

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