Office Trial Causes Channel Conflict
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Microsoft's Office Trial conversion program is so successful, the company now clearly competes with its retail and dealer partners. |
The signs were there in February, when we said the Office Trial program "could" cause channel conflict. There's no more "could" about it.
Microsoft now has 9 percent dollar share for the U.S. retail productivity suite market, according to NPD. Chris Swenson, NPD's director of software industry analysis, largely attributed Microsoft's market share gains to Office Trial conversions.
Microsoft offers the trials through a number of venues, including direct from the Web or on new PCs. Microsoft also directly fulfills Office conversions. Users can purchase activation codes directly from Microsoft via the Web.
Microsoft has historically avoided selling against its channel. The company has no direct sales force and is hugely dependent on resellers, retailers and solution providers to hawk products like Office or Windows. But the Office Trials and newer programs like Windows Anytime Upgrade put Microsoft in competition with retail partners.
Granted, 9 percent of U.S. retail productivity suite sales is a paltry number considering the bulk of Microsoft software sales touch the channel. Still, some of the touch is forced. From one perspective, Microsoft's volume-licensing programs are direct with business customers. Microsoft includes the channel in the deals, but does it really have to? Seems to me that cutting the channel into volume-licensing deals is more a way of soothing potential conflict.
I don't mean to suggest that Microsoft is going into direct sales. The company continues to be quite committed to its partners. The Trial conversions more likely capture sales otherwise missed. That said, partners could ask why they aren't included more in the Trial conversions.
Overall, Office 2007 continues to sell well, particularly compared to its predecessor. For the first six months of 2007, Office U.S. retail sales increased 59.6 percent, as measured in dollars, and 58.1 percent in units, according to NPD. "Unit shipments increased for every existing version of Office," Swenson said.
More broadly, Office has commanding presence at retail, with 96.8 percent dollar share, according to NPD. While there has been lots of talk about Office 2.0, or Productivity Suite 2.0, there's no sign of change coming at retail.
"We haven't seen any kind of impact from the software as a service vendors"like Google, Swenson said.
Maybe Office's continued, undaunted success should comfort partners stung by that 9 percent figure. A little competition from Microsoft is better than a whole lot of competition from Google.
Related Posts:
- Office 2007 Competitors Stack Up, Microsoft Watch, Sept. 18, 2007
- Office 2007: If, When and Why, Microsoft Watch, Sept. 5, 2007
- Microsoft FUD Watch: OOMXL Edition, Microsoft Watch, Sept. 4, 2007
- The Star in Google's Office, Microsoft Watch, Aug. 27, 2007
- Office 2007: Don't Wait for Vista, Microsoft Watch, July 19, 2007
- Questioning Office 2007 Priorities, Microsoft Watch, July 17, 2007
- Early Office 2007 Retail Sales Exceed Predecessor, Microsoft Watch, Feb. 13, 2007

Comments (14)
Sometimes the reason why Microsoft gets the direct sale with Office Trial conversions is the SKU. For instance, a friend bought a laptop recently (Gateway ML309) but it came with Office 2007 Home and Student. She wanted Office 2007 Pro which includes Office Access since they teach that at school as part of her IT Curriculum. She ended up downloading the trial for Office Professional and converted to a full retail license.
- OEMs need an Office Anytime Upgrade feature
- Upsell, include Office Pro instead of Standard or SMB, consumers love the I want the best mentality.
Posted by Andre Da Costa | October 8, 2007 5:26 PM
Wasn't Microsoft supposed to OWN XML?
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_M/threadview?m=tm&bn=12004&tid=1301059&mid=1301132&tof=3&rt=1&frt=2&off=1
So, if Microsoft couldn't bring forth all the XML research and development from the past five or six years... and IBM IS able to bring that kind of thing out... why?
Why is Microsoft so far behind their competitors when it comes to XML? And why does patent 744 describe so much of what Microsoft would love to be able to do... but doesn't?
Ask yourself those questions and you will get a glimpse of why the posters on here are so frantic to convince you VCSY is nothing to worry about. Sure. VCSY may not be something to worry about, but, the court is definitely something to worry about because the court can enjoiin Microsoft from using or selling their products, tools, deals, partnerships that have infringed VCSY's patent 744.
And it doesn't matter how much or how little VCSY has.
Time's coming to a close as this Friday begins the discovery phase of the litigation and we'll learn sooner or later just what Microsoft's been hiding all these years.
Posted by I-Man | October 8, 2007 6:53 PM
The model for the future...
...bare metal and just-enough-as-needed resources. In other words, buy a computer with no operating system. Come home, plug it in, connect your internet link and download precisely the applications and only the precise resources needed for those applications and that's the end of it.
Funny, isn't it? That's what you'll have before long... and without Microsoft yet using Microsoft-like resources to run your MSFT apps and third party apps alike.
That's why the operating system business is doomed and the sooner you clue in to that paradigm shift, the more likely you'll be able to make something out of all the money you have tied up dying in Microsoft stock.
Note this:
http://www.phoronix.com/scan.php?page=news_item&px=NjEwNw
New ASUS "Instant-On Linux" Details
Posted by Michael Larabel on October 08, 2007
Express Gate is meant to be complementary to your traditional operating system for when you want to surf the Internet without fear of Windows attacks and when you don't want to wait for your computer to turn on. ASUS Express Gate also consumes less power than using a traditional operating system. We've been asked in the Phoronix Forums how this technology works, and this ASUS document did provide a brief technical overview.
Express Gate consists of two modules: the Core Engine (CE) and the Virtual Appliance Environment (VAE). The Core Engine is a "proprietary real-time operating environment" that is integrated inside the BIOS flash chip. The Core Engine can be as small as 64KB so that it can embed into current-generation BIOS flash chips. This Core Engine is made up of a multi-threaded operating system (Linux), a networking stack, and a set of drivers (LAN, USB, video, and audio).
To speed up the boot time, the Express Gate only does a minimized POST to initialize critical hardware, prepare the environment for the Core Engine, and then enter the Core Engine. This is opposed to a full-blown desktop BIOS POST that would generally take much longer.
One of the touted benefits of Express Gate / SplashTop was its optimized Linux core so that it's immune from Windows spyware and viruses. The VAE module is read-only and does not write anything to any attached hard disks so it's intended as being a safer environment and any personal files are isolated from the VAE. With the SplashTop Browser and related areas, to provide persistent storage of the user files there is a special user-data partition created on the on-board flash memory, which is only accessible by VAEs.
(read full article at URL)
Posted by I-Man | October 8, 2007 9:00 PM
Microsoft needs to do something bold!
If you can do distributed systems, you can do mobile. If you can do true smartcards distributions, you can do mobile. If you can do real transactioning across http with XML you can do ubiquitous and agnostic mobile.
That's why Google can propose to do something bold because they understand distributed systems:
http://www.news.com/8301-13579_3-9793032-37.html
Microsoft has yet to show they can do anything substantially distributed beyond SOAP and SOAP is an XML based RPC (Remote Call Procedure) framework that's decades old methodology and known to be fragile.
So Microsoft can only hope to buy something to make an attempt. And judging from the way Microsoft handles what they've bought (what value did MSFT ever bring to Bungie? Bungie bailed MSFT's lacking clueless hulk out)
And Garmin? Give me a break. What in the world is Microsoft going to do with a GPS device? Do they have software to make use of GPS? Do they have services to interconnect with mobile GPS? Buying GPS might sound like a "cool" thing to do, but, they have no skills to add value to GPS.
And "Live"? Give me another break... what is it? It's an internet service that's like internet services that are ten years old. No new value no new technology no new thrill.
Did you know the VCSY 521 patent was used to build the distributed smartcard system for Apollo Industries/Transtar?
Did you know the Adobe Apollo/AIR system looks just like a 521 claimset?
But why would Adobe use the Apollo codename? Perhaps for the same reason IBM would use the Viper codename for their XML hybrid database. It puts the industry on notice that, either IBM and Adobe have evaluation rights to VCSY claims or their marketing people are suicidal and just begging for the courts to hear VCSY's assertions. Note both IBM and Adobe projects are still in beta.
BUT, notice, those companies are well along the way toward fulfilling the tenets of Bill Gates' XML vision while Microsoft has yet to show they can.
So, are IBM and Adobe stupid? Or smart as a fox? And is Microsoft stupid enough to fall into the hole? They already have and that's why I think MSFT is the only company being sued by VCSY.
Apollo? Why Apollo?
The smartcard distributed system built for Apollo Industries would need only various levels of repurposing to achieve UI applications over the web.
So here we are after 5 years of XML research and Adobe is putting the client across the web onto the desktop and Microsoft is not even able to field an agnostic web client to third party local machines.
So when you say BOLD. Make sure you say SMART first because the only BOLD stuff Microsoft has done has turned out dismal and boring and a loser.
Posted by I-Man | October 8, 2007 9:57 PM
Link is titled; OpenOffice builds extensions for v2.3
http://www.channelregister.co.uk/2007/09/20/openoffice_org_unveils_new_version_trumpeting_extensions/
Quotes from the link; "It's been a good week for anyone praying for the demise of Microsoft Office. Google unveiled its long-awaited, web-based PowerPoint competitor. IBM took the wraps off the free Lotus Symphony, a complete suite of MS-battling tools. And now we have a new version OpenOffice.org."
"What new features and enhancements? Most notably, version 2.3 ratchets up the use of OpenOffice extensions, software add-ons reminiscent those that hook into Mozilla's FireFox browser."
Posted by chips | October 8, 2007 10:21 PM
Chips wrote : IBM took the wraps off the free Lotus Symphony, a complete suite of MS-battling tools
The recent free Lotus Symphony is a joke !. Before the war begin, the battle has lost
Pleae throw back the Symphony to the drawing table
Posted by Eder | October 9, 2007 2:12 AM
Joe , I found that you always use the arrow icon indiscriminately
Posted by John | October 9, 2007 2:15 AM
Dear I-Man , we plead you to stop the VCSY thing for the sake of sanity
Please .. please .. please .. and throw youself out of the Empire Tower
Posted by Marty | October 9, 2007 2:18 AM
So we can add another episode of fitful patentitis from Ballmer October 8. I would say something in the upcoming discovery conferences with VCSY has Mister Ballmer in a fit.
http://www.vnunet.com/vnunet/news/2200717/microsoft-sharpens-aims-patent
Let's see what the timeline says, shall we?
November 18, 2004 Ballmer accuses Linux of violating >258 patents
November 30, 2004 VCSY SiteFlash Patent 6,826,744 granted
February 7, 2007 VCSY sends Microsoft cease and desist on US SiteFlash patent 6,826,744
February 20, 2007 Ballmer repeats threats against Linux on patents
May 13, 2007 Ballmer accuses Linux of violating 258 patents
May 14, 2007 Estimated beginning of 60 day extension requested by Microsoft for negotiations re: VCSY v MSFT patent suit
October 8, 2007 Microsoft aims patent guns at Red Hat
'You're violating our IP, now pay up,' Ballmer theatens
October 12, 2007 Discovery Meet and Confer sessions scheduled to begin in VCSy v MSFT
Odd, isn't it, how his fits about "somebody else owes us for our patents too!" only days away from each significant VCSy prick of the old Ballmer behind.
You know what, folks? I think poor Mister Ballmer has a few loose noodles. You know? He won't name the patents. He simply blurts them out like an epithet. He accuses and has no followup while his minions and lackeys all follow in behind trying to sooth the angst and anger he engenders. It sounds like the old boy is a little loose in the chair, if you know what I mean. I don't think the executiveship befits him any longer. Kind of the loose canon that used to be good for a FUD volley now and then... but now he's telegraphing the company's problems and it's become quite evident. Something has old Steverino scared and rightly so... if the discovery uncovers the kind of shenanigans VCSY longs have long suspected in relation to the patent and business, Mister Ballmer may have some tall explanations to present to the board and that may also entail Mister Gates also giving his side of the story... from out of the chair.
Posted by I-Man | October 9, 2007 8:23 AM
I-Man ,just when we want to collect your body at Empire Tower , you come back with the VCSY spam again
By the way ,we really don't have a clue on your damned VCSY thing
Posted by Marty | October 9, 2007 9:36 AM
I-Man wrote:
So, if Microsoft couldn't bring forth all the XML research and development from the past five or six years... and IBM IS able to bring that kind of thing out... why?
Since you don't know what you are talking about, stick to the VCSY law suit spamming you have engaged in the last couple of months - for which I doubt you are going to win - and stop writting about technical issues that you have absolutely no idea.
Posted by evan | October 9, 2007 10:41 AM
Joe. Can you tell me how much this has increased since 2000? Since at least 2000 Microsoft has sold retail packages on microsoft.com. I imagine that the trail conversion has caused their direct sales to go up, but I am curious how much it has actually gone up. Working in the channel I will not be concerned unless Microsoft starts to match pricing or starts to offer Open License direct. As long as resellers are able to offer better prices then Microsoft direct sales we will always have the advantage.
Posted by Jake | October 9, 2007 4:16 PM
Andre de Costa:
I would agree with you completely and extend your suggestion to all OEM software, but it seems that there is so much clutter now that the value to anyone is limited, at best.
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Posted by Peter | October 18, 2007 6:31 PM