Smartphone business

Consider the debate about whether people want to use their mobile devices for productivity over. CloudOn, the mobile productivity suite that brought full Microsoft Office and Adobe Acrobat content creation, editing, and sharing to iOS devices, saw 1.6 million downloads over the last 90 days – its largest quarter ever. To reiterate, this isn’t angry birds, or some viral social video app. This is word processing, spreadsheets, and slide presentations. The period brought the company to more than 4 million downloads to date, just 13 short months post launch, and retains roughly 1 million active users.

Today, CloudOn announced Version 4.0 of its app which will bring the same level of productivity formerly available to iOS users to the the more than half a billion active Android smartphones worldwide. (The app was previously available to Android tablets only.) A similar update for the iDevice crowd should be forthcoming in a week or so.

CloudOn’s success is largely attributable to the fact that it doesn’t just port a desktop experience to mobile. As discussed at the time of its iPhone app launch, the smartphone and tablet use cases for productivity apps are as different from one another, as they are from that on a PC. As a result, CloudOn had to redesigned the the Office interface for each device without sacrificing functionality.

“Our goal has always been to create a more holistic workspace for user productivity across post-PC devices,” says Jay Zaveri, CloudOn VP of Product.

The smartphone versions of the app emphasize content consumption and commenting, although they still offer full editing and creation power. The tablet apps emphasize editing and commenting. For example, the smartphone apps launch each document directly into full-screen viewing mode. Similarly, the formatting “ribbon” has been customized for touch-based functionality. As a result, things like changing font size, turning track changes on or off, and creating a table are made extremely simple.

Also, like all CloudOn versions before it, todays release focuses heavily on group collaboration. The app includes a feature called CloudOn FileSpace which allows users to add notes and view all activity on a single file in real time. As a result, on the go team members can stay plugged-in to mission critical activity across their organization.

The holy grail, which Zaveri promises will come to a future update, is simultaneous content creation. We’ve seen this offered in limited functionality within Google Documents and Office 365, but none of these offer universal access across the leading mobile platforms. The company is also working to improve revision tracking, according to the VP. CloudOn integrates with the top cloud storages services, including Dropbox, Box, Google Drive, and SkyDrive, making files even more accessible on the go.

CloudOn CEO Milind Gadekar’s vision for the future of productivity looks like this: one user creating a Powerpoint presentation via his company’s Web app on a PC, then sharing it with two colleague who each add comments and make edits via their tablets, and all while a boss is monitoring the progress real-time via his smartphone while on the golf course.

The Palo Alto startup has raised $25 million to date across three rounds of financing, with the latest being a $16 million Series B round closed in June 2012. Investors include The Social+Capital Partnership, Translink Capital, Foundation Capital, Rembrandt Venture Partners, Charles Moldow, and Chamath Palihapitiya. The company currently has 35 employees, including 14 in Palo Alto and 21 in Israel, and has seen significant growth currently in customer support, marketing, operations, and QA.

Notably, CloudOn does not yet have a sales team and has yet to monetize its product. It will begin testing a “grassroots monetization strategy” similar to that of Yammer and Dropbox, Zaveri says, relying on penetrating organizations at the individual user level before selling up the chain of command.

This presents both the biggest opportunity and the biggest challenge ahead for the young company. Adoption in its first year has been fantastic. But the company has yet to charge for its product and cannot predict how existing users will convert or how rapidly it can attract new paying users. Also, with every day that passes, Microsoft, Google, and others get a day closer to inevitably rolling out competing offerings. CloudOn is counting on its head start and focus on collaborative creation to win these future battles, but its position would be easier to defend with paying users and the added friction of changing that it creates.

“We have worked hard to go beyond the simple content creation available within Office to offer a social productivity platform,” Zaveri says. “Mobile devices change the context and conversation that occur around documents.”