eWeek Microsoft Watch
Advertisement
Advertisement
September 13, 2008 10:49 PM

Office 2007 Reaches a New Low



News Analysis. How's $89.99 for the Home and Student Edition?

That's the price I saw earlier today on a big display near the checkout counter at the San Diego Fry's Electronics. I was stunned, since the software lists for $149.99. Fry's might as well be giving it away. Back-to-school specials are fairly common for Office, but hasn't school already started in most places?

I got to wondering. Is this a trend, or is Fry's just clearing overstock software? Amazon sells Office 2007 Home and Student for $112.49, a really strange looking price. TigerDirect has the software for $99.99, or $89.97 in OEM version. By comparison, Office 2008 Home and Student—that's the Mac version—costs $139.99 from TigerDirect.

arrow.gifGOT A TIP OR RUMOR?

What about Fry's online store? Box copy is the same price as in the store, but the OEM version costs $129.99. Why does TigerDirect have the OEM version for 40 bucks less? Hell if I know. Most of the retailers are running promotions, quite possibly subsidized by Microsoft, for $40 instant savings. That works out to $99.99 at Staples.

But there are no deals at Best Buy or Circuit City, which online sites list Office 2007 Home and Student for $149.99.

The deals don't stop at home. Costco has Office 2007 Small Business Upgrade discounted $90 to $149.99.

Maybe the Office for Windows group is looking to the Macintosh Business Unit for guidance. MacBU deeply discounted Office 2008 for people buying Version 2004 late last year.

Office Home and Student on Sale

What's crazy is how much more businesses pay for the same software. For starters, consumers get three licenses—that's three product activations—with their Home and Student Edition. Fry's sells Office Standard for $349.99, or nearly four times Home and Student, and there is one activation. Amazon has Standard for $314.99.

OK, it's not exactly the same software. For Version 2007, Microsoft swapped out Outlook for OneNote in Home and Student. Windows Live Mail should be a plenty good substitute for most consumers or home-based businesses.

So, what's up with all this Crazy Eddie pricing? These are the deepest consumer Office discounts that I've seen in years. Here are my guesses for why Microsoft would subsidize the low pricing, with percentage of likelihood:

  • It's the end of the back-to-school buying season, when Microsoft and retailers often discount consumer Office (50 percent).
  • Microsoft is seeding the consumer market with the Home and Student Trojan horse for supporting Web services such as Office Live Workspace (25 percent).
  • The low pricing is a way of psychologically preparing the consumer market for $69.95 Office Equipt, which packs 12-month subscription versions of Office 2007 Home and Student Edition, Windows Live OneCare, Mail, Messenger, and Photo Gallery. (20 percent).
  • Microsoft is shoring up market share as a proactive response to freebies like Google Docs. (5 percent).

Have you got a better reason? Please share in comments or by e-mail.

[Please send your tips or rumors to watchtips at live.com].

TrackBack

TrackBack

http://www.microsoft-watch.com/cgi-bin/mte/mt-tb.cgi/14935

Comments (33)

Response, all those years I was milking my customers and enjoyed receiving your billions. Thank you!

Now with OpenOffice 3.0 releasing soon and the economy going to the gutter, I am forced to discount my products.

However, there will be no discount for the 2008 version, as being MAC users, they can pay more as they can afford those over-priced Powerbooks.

B. Gates

smist08 :

I got the impression it just isn't selling anymore. Was at a Best Buy during the back to school rush and they were really doing the hard sell to people to buy office and symantec anti-virus. But everyone seemed to be reacting as negatively to these as the do to extended warantees (and rightly so). I guess people know there are lots of free alternatives like open office. Or perhaps they are just getting good at running BitTorrent.

mailbox01 :

I was able to get Office 2007 Ultimate Edition for $60 from MS Ultimate Steal program. I just used my wife work email address from the Hospital that also uses .edu. Also, being in Finance, none of the free alternatives can match Excel. OneNote was an added bonus with my Tablet PC.

Goblin :

I love these posts.

Mailbox01: "Office 2007 Ultimate Edition for $60"

Thats nothing to be pleased about, you could have got Open office or Abiword for free.

Its nice to see the above posts and goes back to what Ive been saying all along, people today are realizing they have a choice, that choice is free and its also just as functional.

Even if office was open source and given away free at newsagents I wouldnt be interested. I use Office at work and find Abiword is a far better wordprocessor.

Goblin :

Also Mailbox, Id be interested to know what you are doing with Excel that cant be done with OO.

Al :

@Goblin:

Mailbox will probably respond with "VB Scripts", knowing full well that 99% of Excel users don't use them & can't program them.

Fact is, for that 99% of the spreadsheet using world, there is NOTHING Excel does that isn't done just as well as OpenOffice (except for that godawful ribbon MSFT insisted on foisting off on users without the option to go back to "classic" menus)

Goblin :

I dont like to suggest that Mailbox has an interest in Microsoft, as it would not be true to say all the people that are happy with the product are.

In mailboxes case though, it does make you wonder when he doesnt even give an example of what he was trying to do. If he had, someone may have been able to give him a free alternative.

Mailbox sounds like either a user who has Excel and has never tried any other alternative, or an MS associate who would rather not go into what this unique thing is that Excel does that nothing else can (probably because its make believe)

@AL, nice to meet another like minded person on a Microsoft Watch site!

The major trade off of Office Home and Student is the inability to get upgrade rights to future versions of Office. So a user who buys Office Home and Student 2007 will not be able to qualify for upgrade pricing on any of 1 license upgrade SKU's to upgrade that existing copy, clean installs only or the full version of Office 2007 or Office 14 SKU's such as Standard, SMB, Pro/Enterprise.

Its still a great deal though, using it on some of my systems and it gives me most of what I need.

thatguy :

I got mine for $100 this May, so there's nothing that needs to be made-up to see why it's selling at a lower price.
What I don't understand is...if the price is too high, you complain, if it's too low...you complain? Stop complaining and overanalyzing just to get out a post...

Oh and "Bill Gates" nice try but you're not funny.

Ralph :

Whether one goes with Alibi Word, Open Office or pays for MSFT Office. One fact remains, competition from the free open sources ultimately lowers prices of MSFT products....it is a win win situation for consumers.

John Templeton :

While open office is free, it's like choosing a Yugo when there's a BMW available. Especially when the BMW is at a reasonable price. Nobody will choose the yugo unless they are skint.

Me, Excel has no weird Java delays.. and you can format it all in nice colours with a click-click action - instead of searching through a dozen different menus.
Plus, freeze top row is easily available, I could never find it before.

Mr. Reality :

Ok here it goes ... no one doing serious document or spreadsheet creation uses OpenOffice or Google Docs ... period. I'm sure there are some political or "movement" oriented folks that use it, but, try as they may, they are not a market for those of us who unfortunately need to sell the fruits of their labor to make a living. The only folks I know of who are forced to use OpenOffice are Sun employees using Sun issued computers.

billybob :

Mr Reality : If nobody used OpenOffice, then why is Microsoft dropping their price?

If there were no competition then they could charge what they like. The price drops on Office and XP for the low-cost laptops are a clear sign that Microsoft is facing competition.

The problem for Microsoft is that they are their main money makers, thats why there is such a rush to find the next cash-cow (XBox, Zune etc etc).

Goblin :

@John Templeton - I love your comparison. What you failed to mention though is that the "BMW of Excel" is expensive (well more than free) doesnt run as efficiently (just look at its drain on your resources) and can require you to buy a new car when the rear wiper breaks. (When you find out that XP is no longer supported in a later version)

@Ralph, completely agree, its what Ive said repeatedly here, although anyone with a financial interest in Microsoft would not agree that open source is good.

@thatguy - Are you reading the same thread? The question posed is "is MS lowering its prices through fear of Opensource/global financial status?" Personally even £1 is too expensive if I can use an opensource one for the same thing. Your comment of "nice try Bill Gates" nobody for one second believed it was (did you?) it was a little bit of wit injected into thread. It certainly didnt do any harm (unless you are either dependent on revenue from MS performing well or you are one of the obsessive types who will buy everything from one company and defend it like it was your child)

@Billybob - Spot on.

Goblin :

@Mr. Reality

Why does nobody who is involved in "serious" work use OO?

Again, like the previous poster, youve managed to avoid giving any reason.

Ive got news for you sunshine, the previous company I worked for did accounts for a MAJOR firm, and they were quite happy with OO, so I ask again:
What is this magical feature that only Excel can offer?

I would genuinely love to know.

alanh :

Poor Mr "Reality". Our high-tech company uses OpenOffice for all of our documentation, presentations, reports, proposals, spreadsheets. That's everything, no MS Office whatsoever. We have done for 5 years. Enjoy your "reality", it's just different from the real world that some of us inhabit.

Goblin :

@Hi Alanh!

According to Mr Reality, you cant be a serious company then!

I wonder what "reality" Mr Reality is from. Its certainly not the same one as us.

I think alot of these pro MS comments are made by people who have never used an open source package. They want to be involved in the debate so they post comments supporting what they know (MS)

All I want is for one pro-MS user to come forward and give us this feature which makes (for them) MS packages better than an opensource alternative.

Its not much to ask, is it?

I cant say if there is or there isnt an advantage of Excel over OO. My job does not require me to use a spreadsheet at all (and personally I prefer Abiword for a wordpressor), so I am actually interested. If there is one, then it could certainly be something to be considered for future OO releases.

Goblin :

Another thought just occurred to me, for all the now silent MS supporters, dont you think it strange that Microsoft-watch seems to have more fans of opensource involved than actual MS ones?

I think that says a lot, and the fact that we've yet to see a coherent argument put forward by any MS user, tends to suggest either

a/ they dont understand what we are talking about

or

b/ they cant give an answer because they havent got one.

MS users, prove me wrong. Please.

Philosopher :

Re: "Ok here it goes ... no one doing serious document or spreadsheet creation uses OpenOffice or Google Docs ... period."

The true reality: Those who say it can't be done should stay out of the way of those who are doing it.

Re: "While open office is free, it's like choosing a Yugo when there's a BMW available."

As poor as car analogies are, this one would still be much more accurate to claim "While open office is free, it's like choosing a Toyota when there's a BMW available." Yes, it's cheaper, has fewer features, isn't as polished in some areas. But it's far more reliable even though it's a fraction of the price, and its features are more than good enough to justify its use over the BMW, especially considering the lower price and higher reliability.

And look how the luxury car market was once owned by the likes of BMW and Mercedes, and is now owned in part by Lexis (Toyota). See what happens to the well-established guard who thought they were invincible but then found out how much higher quality at a lower price meant to their customers?

@Goblin, alanh, and billybob:
Wow! You've managed to touch a few nerves! I guess we're past the "first they ignore you" stage and the "then they laugh at you" stage, and are now into the "then they fight you" stage.

Bill Brock :

Mailbox01, I doubt you have ever used open office if you make the statement you made about free alternatives. I'm a CPA and spreadsheets are indispensible in my work. I have yet to find anything OO wouldn't do that I needed.

chips :

First, I would say that Frys has some very good specials to get you in the door. price wise. However, M$ Office at any price or free is just too much. Not a big fan of WGA, activation, Bill spying on us, and just general bugs, that need about 3 massive service packs downloaded and installed to get M$ Office working somewhat decently.

I have converted many user to OpenOffice and Abiword. And for that matter, KOffice in Linux is also a very good option, and again FREE! Why would anyone in their right mind, pay for an inferior product like M$ Office when there are better free options available with a lot less hassle to install and get running.

What this price reduction reminds me of is when Micro$oft cut the price of Vista. When the product starts to tank, the price is cut to prop it up. Since Office is the main cash cow of Microsoft, this "price cut," heralds declining revenue for the future of this monopoly. Short term sell.

Philip Daniels :

Windows Live Mail client a subsitute for Outlook 2007, you must be joking. No calendar, no add-ins (useful or otherwise), no integration with Office, difficult migration from OE (big issue for Vista converts - Windows Mail is dead and it has the same problems migrating from OE as WLM), WLM's integration with the MS search engine is problematical, there's no local help and the Online help is awful - I could keep going but I wont. The best thing going for WLM Client is that its a pretty good Usenet client for text groups; but most folks who buy Office for Home don't know what Usenet is, and they would be happier I suspect with Gargoyle's Gropes anyway.

IMO Replacing Outlook with Onenote was a rotten idea, all most home users want an is electronic PostIt note and there's zillions of those for free, I think they pushed Onenote out there because of the popularity of Evernote.

As to Office being bloated, it's true - but does anyone seriously argue that Open Office is any less so. Where's its calender and where's it's email client, what about a Publisher equivalent and how about an OONotes, where's that. OOo say they are going to integrate Lighting & Thunderbird into OO; after 3 years in pipeline Moz have yet to get TB & Lightning working seamlessly together and they own those products!. That still leaves Publisher and OneNote to do. And IMO MS's support for OOo's file formats is better than OOo's support for MS's - so who's more open, Micro$oft or $un.

Just-a-drone :

Part of the reason for the discounting of Office 2007 is that despite the ribbon there is no real difference between Office 2007 and 2003 (or XP).
Most folks just bang out a Word document or PowerPoint presentation, and all the other features remain unexplored and unused, i.e., no perceived value to upgrades.
Plus, why upgrade to Office 2007 when you can install as many copies of Office XP as you want? (Word 97 anybody? I've still got the disk).

Butler T. Reynolds :

I suspect that the competition from OpenOffice and Google Docs may have something to do with it.

I use all of them: I'm a C# programmer at a company that uses Microsoft products. At home I run Windows Vista as well as Ubuntu Linux. I use MS-Office, OpenOffice, and Google Docs.

MS-Office is the best by far. For home use, OpenOffice and Google are quite sufficient -- especially for the price! But at $90, I'd seriously consider MS-Office for my Vista PC. OneNote would be worth the price of the whole package.

Look, you anti-Microsoft zealots should just drop it and cool your jets. You'll be much happier if you just use what makes you happy and, if you choose, enjoy the best that each platform has to offer. Why get your panties in a bunch if someone chooses to spend his money on Microsoft products?

Now, I still can't figure out why in the heck anyone would ever buy a Mac.... ;-)

JM :

I have been using OpenOffice for about a year now with no issues. I recently updated my resume on it and it converted to a Word document with no issues. The OpenOffice spreadsheet app works pretty good too. I see no reason to switch back to MS Office at home.

It's a good alternative to cash strapped students.

OpenOffice Price $0.00

smist08 :

I wonder if it has to do with the dropping price of laptops. When laptops were all around $1500, adding a couple hundred for office was nothing. Now that most laptops are around $599 with a few down to $399, suddenly adding $200 is a really big deal and people say no. Same problem Vista has of being too expensive relative to the hardware.

chips :

Butler T. Reynolds says:
"Look, you anti-Microsoft zealots should just drop it and cool your jets."
----------------------------------------------------
I find it amazing that everyone who does not support the bottom line of M$ has to have a label put on them. But this seems to be the strategy lately with the crowd from Redmond. Since when is saving a lot of bucks, and getting better software, that does not spy on you, require activation, use WGA, and need about 3 massive service packs to work properly, considered to be anti-microsoft? Sounds more like consumer friendly to me to get OpenOffice or some of the free alternatives out there. Money is tight Softies, and the best place to cut expenses right now is to forgo MS Office and use OpenOffice, KOffice, or Abiword, all free, and hassle free. Its called a recession, and your cash cow is going suffer.

Also while I am on this rant, Linux users tend to be, or at least were, Windows users too. So Linux users tend to know more about the products and the benefits of each. Where as the the ones that want to paint them as "anti-microsoft, or MS Haters," most likely do so to try and marginalize their message, as they most likely work (Softies) for, or have a vested interest in the Microsoft Corporation.

Seldom do I ever see the "softies" actually debate points that are made, instead they would rather just label someone anti-ms. And yes, Softie is a label, but a neutral one.

Goblin :

@Butler T. Reynolds

I would be very interested to chat with you further. I am a C++ coder although I move more towards optimization of C++ routines into assembly language. I like the way you declare yourself as a programmer, then go on to say "I'm a C# programmer at a company"LOL

We also have a saying amongst us coders, its goes something like this:
"Those that can C++, those that cant C#"

What ever happened to J?

To everyone else who may not know "J" was a failed Java type scripting language by MS made before C#. C# is IMO an ultra-high level language (and closer to Java than any other traditional language), it can probably be learnt by the average 15 year old in about 6 months. Its about as good for performance intensive routines as a ZX81, and the fact that Butler admits to using it professionally hardly puts him in the upper echelons on the coding elite.

The reason why this post sounds harsh, is just like Butler stereotyped everyone who posts an alternative to MS must be anti-ms, Ive now posted my stereotype that anyone who uses c# either professionally or as a hobby is a lamer.

Not very nice is it Butler?

Oh and for the record Im not anti-ms. I really liked Windows 3.1

Goblin :

@JM - Im pleased to hear you found an alternative which was suitable for your needs, and better than that - free.

As ive said before Software freedom for me isnt about only free software, its about making an informed choice about the package that is right for you. I would say that for most of us JM's requirements in a wordprocessor are the same. JM has found that OO is great for him so why wouldnt it be great for others who have similar demands to him? - Although personally I find AbiWord the better package due to not needed the other features of OO, and I also believe Abiword is faster.

Lawrence D'Oliveiro :

All this discounting can't be good for Microsoft's profit margin. The company is founded on the bedrock of fat profit margins for Dimdows and Office: cut those away, and the company is nothing.

But the only way it seems able to compete with open-source alternatives is on price. That's a dead-end strategy that the company will ultimately lose.

Former Retailer :

Every year Microsoft gives their key retail partners one or two weeks during back-to-school (and a few other holidays) where Microsoft pays a "bounty/back-end-rebate" per unit sold when a retailer advertises and promotes some key products that Microsft pick ahead of time. This in effect lowers the cost to the reseller for that timeframe so you can see some aggressive prices out there. Fry's usually passes all all or nearly all of those funds to drive traffic into their stores.

Microsoft usualy spreads out the timeframe amongst the major reseller so that only 1-2 have the hot deal at any one time.

chips :

I am not sure what this article is about? It sounds more like an advertisement to sell MS Office than anything else. Inside of Joe writing about Microsoft, he is advertising one of their products.

If Joe was doing anything else, would not he have at least mentioned some of the competing product to MS Office? Not once did I see that, except for almost everyone who commented. Is it that M$ is paying the bills here at Eweek, or are you trying to be a bigger fan than Ed Bott?

Joe :

Philip Daniels wrote: "Windows Live Mail client a subsitute for Outlook 2007, you must be joking."

Actually, Philip, before the switch from the old Hotmail, Microsoft figures showed that about half of active subscribers were small businesses. And that was using a Web browser. For these small businesses, Live Mail client should be an improvement.

I was thinking sole proprietorships and home-based businesses for my Live Mail is good enough statement.

Joe

Post a Comment

 
 
RSS Syndication

Advertisement
Advertisement
Microsoft Watch     Contact Us | Advertise | Site Map
Ziff Davis Enterprise