Microsoft Working on Office 15, Beta Launch in Early 2012

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Microsoft (NASDAQ:MSFT) is one of the largest enterprise software makers, and completely dominates the market when it comes to productivity software, with its Office suite. Microsoft Office competes directly with Google (NASDAQ:GOOG) Docs, Apple (NASDAQ:AAPL) iWork and open-source alternatives like Open Office and Libre Office. Microsoft is working on the next version of the Office suite – Office 15, which will be launched in 2013, after the launch of Windows 8. [1] It is reportedly planning to launch the first beta of Office 15 in early 2012. Office 15 will have a completely redesigned interface, just like Windows 8, to work on both computers and tablets.

Office is Microsoft’s most valuable business in terms of revenue, and accounts for almost 29% of its $32 Trefis price estimate.

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Office 15 to Provide Significant Boost to Microsoft’s Revenues in 2013

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Office 2010 was a huge hit and sold more than 100 million licenses. It showed an 8% increase in revenue last quarter, compensating for the lull in Windows sales. However, sales are expected to slow down considerably in 2012, as it becomes more than 2 years old. It recently launched Office 365, an on-demand, cloud based version of the Office Suite, in order to capture the growing cloud based productivity software market, in which Google Docs is emerging as a serious competitor. Office 365 sales have been picking up, but they are still too low compared to sales of Office 2010.

We expect Windows 8 sales to lift Microsoft’s revenues in 2012, followed by a further boost in 2013, with the launch of Office 15. Microsoft currently has a 94% share in the office productivity software market, which is expected to decline marginally over the forecast period, due to increasing competition from alternatives like Google Docs and Zoho Office.

We currently have a $32 Trefis price estimate for Microsoft, which stands nearly 25% above its market price.

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  1. Microsoft planning beta of next-generation Office 15 suite in January, Winrumors []