Microsoft faces iPad, iWorks without articulated plan for Windows 8 Office

While eager to demonstrate next year's Windows 8, Microsoft has been reticent to make any promises about a tablet friendly new version of Office sporting the new Metro look, a clear departure from Apple's strategy of presenting the original iPad with a suite of new iWork apps, but only after both were finished and ready to sell.

Microsoft has outlined plans to bring the iPad's exclusive App Store software model to Windows 8, at least for the new Zune-inspired Metro apps that Windows 8 tablets will run. However, it hasn't announced parallel plans to bring its own Office apps. Instead, the company has said only that it is still only thinking about its Office options in the tablet arena, despite revealing plans to get Windows 8 itself to market within a year.

Speaking with financial analysts, Microsoft's chief executive Steve Ballmer answered questions about a Metro Office release by saying, "you ought to expect that we are rethinking and working hard on what it would mean to do Office Metro style."

Ballmer then revealed that Microsoft was still in the early stages of exploring the concept by saying, "the question is Metro interface for Office. How critical is it to Windows 8 adoption to have software that takes full advantage of Office with Metro?”

Office now more important to Microsoft than Windows

The lack of an articulated direction for Office on tablets is notable because many Windows enthusiast observers are hoping Windows 8 will do to the iPad in tablets what Windows 95 did to the original Macintosh in graphical desktops.

However, Office isn't just the icing on top of Microsoft's Windows cake. Microsoft's revenues from its Business Division (90 percent of which come from Office, according to the company) have now exceeded its Windows & Windows Live Division (representing desktop OS licensing). Office also earns Microsoft more profits than Windows.

Windows is also experiencing stagnating growth, while the company's Office revenues and profits continue to grow at a healthy pace. And while Microsoft has emphasized its Xbox 360, Kinect, Zune and similar consumer devices, its Office group makes more than 100 times the profits of its entire Entertainment and Devices Division. Office is currently Microsoft's biggest cash cow, and it has long been near the top.