- Microsoft has acquired Acompli.
- The deal doesn’t generate immediate accretion, but it will improve Microsoft Office capabilities in the foreseeable future
- This is important because Microsoft Office is the largest contributor to revenue.
- Frequent product updates are needed, for Microsoft to retain and grow its Office 365 subscriber base.
Microsoft (NASDAQ:MSFT) has acquired the mobile email app company Acompli. Admittedly, Acompli doesn't generate any revenue, so it’s basically a conceptual idea that has yet to reach commercialization. Microsoft already monetizes Outlook through the Office 365 subscription. The problem with Microsoft’s e-mail client is that it’s not a primary selling point for corporate or non-corporate users. Outlook is outdated, when compared to many modern e-mail applications, and doesn't have the type of layout or capabilities that users are looking for.Microsoft (MSFT) recently made a $200 million acquisition of Acompli. The app offers some key synergies to Outlook, which is a part of the Office 365 suite.
According to Microsoft:
In a world where more than half of email messages are first read on a mobile device, it’s essential to give people fantastic email experiences wherever they go. The Acompli team is passionate about this quest. Their app provides innovative ways to focus on what’s important in your inbox, to schedule meetings, and work with attachments and files. Users love how it connects to all email services and provides a single place to manage email with a focus on getting things done.
Acompli comes with features that simplify the process of sorting e-mails. The artificial intelligence is what makes the product pretty valuable, as it’s able to sort content from auto-responders, or mass e-mail that’s not pertinent to the user in the “other” tab. More pertinent e-mails that may demand an immediate response are put in the “focused” tab.
The application also links to web-based e-mail clients like Gmail, Yahoo, and AOL. This creates a central area to deal with e-mail, and makes multiple account management significantly easier. The product also comes with a calendar that’s pretty intuitive to use, and can be included in the body of an e-mail, so the person replying back to the e-mail is able to choose both a time, and schedule it into a calendar on their end.
According to Tech Crunch:
As for how Acompli is being tied into Microsoft going forward, a lot of the details are still being ironed out, including whether it will be rebranded, or sold along side other Microsoft products as a part of a bundle deal. But Acompli for now is remaining focused on email, not other parts of an online productivity suite. Email will remain the heart of what it does, and its other features like calendaring or file-sharing spin off from that.
The business aspect of it is complicated, because the app is pretty popular, and has dedicated users. Rolling the product into Outlook maybe counter productive, as it might alienate both Outlook and Acompli users. However, the application has useful features that when integrated into outlook may give Microsoft a better e-mail client when compared to other clients like Gmail and Yahoo. For those reason, Microsoft’s $200 million capital outlay may be justified. Office 365 is in the early stages of growth, and moving over as many licensees to a subscription based model will require Microsoft to make frequent updates to every member of its product family.
Microsoft balance sheet is pretty strong as it has $85.45 billion in short-term cash and assets. In FY 2014, Microsoft Office generated $24.323 billion in revenue. It is Microsoft’s largest segment in terms of revenue. Therefore, it’s no surprise to see Microsoft do whatever necessary to make its Office product the best that it can potentially be.