Yesterday we heard that Apple had blocked Microsoft’s new SkyDrive app for iOS because of a disagreement over the 30 percent cut that Apple demands for paid app and services. The core of the issue was that SkyDrive users could purchase storage without the app but directly off Microsoft’s website, hence bypassing Apple all together. Apple claims that it deserves a cut when a user buys more storage, but Microsoft contends that as SkyDrive is a cross platform service, a user could simply move to a different platform and yet even in that case Apple will receive the 30 percent cut. Now, this is just the tip of the iceberg as AllThingsD is reporting that Microsoft is facing similar problems with Apple for its incoming Office 365 service for iOS.
This is because Apple insists on having its cut, while Microsoft believes that Office, which is its most recognized product after Windows, will bring long awaited productivity chops to iOS that it does not currently have and it does not want to share a substantial sum of its profits with Apple. This was of course to be expected after the SkyDrive app was blocked. Apple apparently is taking a heavy handed approach and keeping a ‘rules are rules’ stance. Microsoft on its part cannot afford to share the profits with Apple for Office 365 because it is a cross platform cloud based subscription service that will be used across desktops, smartphones and tablets.
This means that if a Windows user has a subscription for Office 365 and he wants to use it on his iPhone or iPad, Microsoft will need to share 30 percent of the profits with Apple, which we don’t believe is a fair deal.