Apple Cuts Microsoft No Slack on Subscription Sales Via Office for iPad

By Katherine NoyesSoftware as a service (SaaS) may not figure as prominently as other subscription-based products on our pages here on Subscription Site Central, but there’s no denying the growing category can offer some instructive insights for a variety of subscription-based sites.

Enter the new Office apps for iPad, which Microsoft rolled out last week. Microsoft Office general manager Julia White unveiled the apps at a press event in San Francisco, and while the product is free for reading and presenting purposes, it makes use of Microsoft’s Office 365 subscription for editing features. It’s available to existing subscribers at no extra cost; for others, Microsoft offers a free 30-day trial for Office 365.A subscription to Office 365 costs $99 per year for most functions. What’s particularly interesting is that Apple appears to be sticking with its 30 percent cut on purchases made through the iPad software — much the way it did last year on SkyDrive storage space purchased through the SkyDrive app. So, even for Microsoft — a big boy in the space if ever there was one — that fee structure plays a key role in determining the revenue that can be generated with the software.It’s possible that Apple is simply squeezing a key competitor, of course. Far more likely, though, is that it’s simply not giving a break to anyone; even Amazon didn’t get one for its eBook sales, after all. That, indeed, is why numerous publishers — such as the Financial Times — have already gone to great lengths to avoid giving Apple that cut, most notably by selling subscriptions through their own sites rather than the app store. As far as we can tell, that remains a best practice for keeping all the revenue you can.