SAN FRANCISCO--Microsoft has a new plan to make more money from Office: give it away.
With Office 2010, one of the biggest changes is how many ways there are to get Microsoft's most profitable software program for free.
In addition to the free, browser-based Office Web Apps, Microsoft is also offering PC makers the ability to install a basic version of Office on new computers. The new program, Office Starter, includes a stripped-down version of Word and Excel. PC makers, retailers and Microsoft can all make money if the PC buyer later upgrades to a paid version of Office.
New buying options for Office 2010 include a "product key card" that can be used to upgrade the basic version of Word and Excel on new PCs.
"People will be exposed to the Office 2010 experience from the minute they turn on that PC," Microsoft Business Division President Stephen Elop said Wednesday in an interview here. Microsoft is estimating that 80 percent of new PCs sold at retail after the launch of Office 2010 will have the starter edition of Office pre-installed, he said.
It's obviously a huge gamble for Microsoft, which still makes the bulk of its profits from Windows and Office. That said, most of the Office money comes from businesses and, on the consumer side, Microsoft is also trying to contend with free rivals like Google Apps.
Plus, while Starter is new, Microsoft has always had a lower-end productivity suite. Office Starter replaces Microsoft Works, a product that was both sold at retail and heavily pre-installed on new PCs. While Office Starter only shows the user the slimmed-down versions of Word and Excel, PC makers are actually loading the full version of Office, ready to be unlocked as soon as the buyer pays for an upgrade.
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I am not supprised by this at all, with the likes of Google Docs and Openoffice getting more and more popular, and for MOST mum and dad users, Word and Excel will be more than enough for what they want.