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Office Will Determine Whether Microsoft Can Beat Apple

Stocks in this article: MSFT AAPL GOOG AMZN

From the start of the pitch -- whether in a retail store, the enterprise or education -- Office is the differentiator.

Set aside the positive early reviews on Surface. They mean little. The real world will decide Surface's fate, not a reviewer nerd who doesn't want to anger Microsoft out of fear of not receiving an invitation to the next "big event."

Ballmer likely will hold off on opening Office up to mobile environments.

After the holidays, he'll decide whether to license it to iOS and Android.

If he does open Office, the half-full glass says he thinks Surface is strong enough to compete with iPad and other devices without Office exclusivity. Microsoft already seems to think that's the case with relation to price.

The half-empty-glass perspective laments another Microsoft failure -- this time at selling hardware (save for the Xbox) -- and billionaire Ballmer gets fired.

What's sad about the whole affair, assuming I'm correct and it doesn't end well (defining "well" as Microsoft actually dings Apple hard), is that early on it looked like Microsoft had something here. Specifically, an ecosystem that could tie several solid to halfway decent platforms together.

It comes down to mindshare -- something that's difficult to control given Apple's foothold in mobile -- and marketing.

Instead of commercials where you try to make the uncool look cool and make the same mistake multiple times by riffing cluelessly on Apple products and pricing, spell out for users how Xbox, as hardware and a platform, ties into Smart Glass and Surface and how these things tie into tablets, smartphones and PCs.

Microsoft hasn't done this. Considering the pickle the company is in, it's tough to fault them.

It's a tall order when the only thing you really have going for you, other than a horribly marketed Xbox, are productivity tools. Office might be big, but, just like the CrackBerry habit, its hold on consumers can be broken.

At the time of publication, Pendola held no positions in any of the stocks mentioned..

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
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