In a recent article on CNN.com, Morgan Stanley's Adam Holt estimates Microsoft (NASDAQ:MSFT) may be leaving money on the table by not offering a full version of its Office suite on Apple's (NASDAQ:AAPL) iPads.
In the piece, he goes on to estimate that this decision is costing Microsoft two and a half billion dollars.
He may be right but it's absolutely irrelevant.
What's strange about the analysis is how incredibly one-sided it is and how it doesn't talk about some of the potential downsides of such a decision.
Well that's what I will do now.
First some context about Microsoft Office.
Microsoft Office and Windows are the crown jewels of Microsoft's inventory. Combined, their business units both brought in $11.48 billion to Microsoft in the last quarter alone.
I respectfully submit though that even if you took the money out of the equation, the strategic value of Microsoft Office is priceless.
Microsoft Office was introduced to the world 24 years ago (August 1, 1989) and has spawned many imitators but none have been able to ever truly replace it.
There have been complaints about Office pricing and features for as long as I can remember but there has been no real dispute about its absolute dominance in its field.
Over the past couple of decades, the popularity of Microsoft Office has made it difficult for companies to move from Microsoft's Windows Operating System to alternatives.
Productivity is the cornerstone of all good businesses and this usually requires a stable and reliable Office Suite.
The same thing is happening again with mobile devices.
Today, Microsoft's competitors Apple (AAPL) and Google (NASDAQ:GOOG) are both relentlessly looking to define the future of mobile computing. A part of that effort will no doubt involve getting consumers and businesses to adopt their smartphones and tablets.
As companies start to look at which phones and tablets to deploy, the Microsoft Office suite will inevitably be part (not all) of that discussion.
"How do we share spreadsheets? How do we save documents? What happens to all the documents we have in our archives? What about presentations?"
These are the questions that Apple and Google salespeople will have to answer when pitching their mobile hardware.
Even though there are some viable alternatives (like Google Docs), the truth is, it's always hard to make the case that a company should make substantial changes to the way it does business.
If a substantial change is defined as one that would involve new vendor contracts, implementation, support, testing, upgrading and user training, moving users from Microsoft Office to anything else qualifies.
Now if businesses don't have to make a change i.e. if the iPad has a full version of Office, the business case for going with a Microsoft mobile device like a Surface Pro tablet simply disappears.
The Microsoft Surface Pro tablet is twice as expensive, less mature, has fewer applications and is not (yet) seen as a credible product. The same is also true when you compare the new Windows Phones to Apple's iPhone.
To make things worse, iPads and iPhones are already in millions of households so as the BYOD (Bring Your Own Device) era becomes a reality, companies stand to save money by having employees bring their own existing hardware to work.
Simply put, there is very little upside for Microsoft to share this intellectual capital. If Microsoft provides Office to its competitors, it will be mortgaging its entire mobile future for a couple of billion dollars.
It's going to be hard enough for Microsoft to compete in the new mobile landscape going forward. There is absolutely no need for the company to help its competitors.
I believe that the Microsoft Office suite is a vitally important asset for the company as it moves forward.
If Microsoft ever loses that asset, it's time to sell.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: While I have no business relationship with Microsoft of any sort, I am the owner and editor of several Windows websites (Windows8update.com, Windows8enterprise.com among others) and I write primarily about Microsoft for a living.