Office Trial Could Cause Channel Conflict
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Microsoft's Office Test Drive program has grown so successful, the company is increasingly competing with its PC manufacturer and retail partners. |
The number of people converting Office Trials to full product increased 196 percent between 2004 and 2005 and 105 percent between 2005 and 2006, according to NPD.
"Microsoft is now one of the leading retailers of its own product," said Chris Swenson, NPD's director of Software Industry Analysis. "I don't think the industry is aware how successful the trial conversion program has been over the past couple of years."
Microsoft offers the Office Trial by two methods: preinstalled on new PCs or by direct download from its Web site. The trial version works for a limited time with some limitations on functionality. Microsoft directly fulfills conversions to the Office suite.
The program's success "can't make retailers happy," Swenson said.
Microsoft's direct success comes at a time when productivity suites make retail sales gains, even as some other software categories retreat. Last year, productivity suite category retail sales increased 11.8 percent year over year, according to NPD. Microsoft's family of Office suites had 96.8 percent share, as measured in dollars, up from 95.9 percent in 2005.
With no direct sales force and huge dependence on resellers, retailers and solution providers, Microsoft has historically avoided selling against its channel. More recently, however, the company is doing more direct fulfillment, with Windows Anytime Upgrade and Vista Family Discount as other examples.
Anytime Upgrade lets users buy up to another version using their Vista DVD. Customers would purchase a license key from Microsoft. Similarly, Microsoft directly fulfills $50 Windows Vista Home Premium upgrades as part of the Family Discount.
"Microsoft is trying to mitigate channel conflict by referring people to the Windows Marketplace," Swenson said. There, people purchase Office 2007 or Windows Vista for download or get referral to a Microsoft dealer.
Windows Marketplace is an important hub in Microsoft's channel strategy, but direct sales "are a potential sore spot for retailers and OEMs going forward," Swenson said.
Comments (6)
Joe you must really love getting your "stats" from the NPD Group (even though they make mistakes in their data).
Next microsoft is not the only one that does this you know (and I would be surprised if you did NOT know), try symantec for one. They sell their products on their website and (of course) it's available in stores.
I really don't know what you are going on about, the premise behind this story is nothing new at all !
Posted by Neil | February 14, 2007 9:30 PM
Neil, the premise behind the story is that if MS are too successful, they might anger their partners.
Many people have written similar news stories regarding apple's iTunes store taking DVD/CD sales away from Wal-mart, Best Buy et al. It's a legitimate story.
I've noticed you complaining a lot about Joe's articles. Why do you even read them? Surely you have better things to do. Or not?
Posted by Ben | February 14, 2007 9:45 PM
Ben
Is symantec successful at selling their software themselves ??
I comment on Joe's articles when they are either wrong or beat up, which this story IS !
There is nothing new in this story at all !
By the way symantec is not the only one that sells it's own software, lots do !
Lastly I have things to do ... sure, but I am not going to let Joe Wilcox get away with "so called" stories like this, someone has to say something.
Occassionally I am not alone either in this thought.
Posted by Neil | February 14, 2007 10:04 PM
I'm a reseller and the DSP Microsoft Office 2007 is only a COA license. I do hardware integration and will not install O/S or application to the system - becasuse linux or dual-boot O/S may required by the end-user. I was surprised that my customer need to download from Microsoft for the 60-day trial then use the COA to complete the installation. There's no CD or media in the Office 2007 software from Microsoft authorized distributors. It's confusing and who cares - I use Linux and OpenOffice for free.
John
Posted by John | February 15, 2007 2:10 PM
Ben
I comment on Joe's posts because he insults my father when he calls Microsoft. No-one is entitled to criticise Microsoft in ANY WAY, in case I get ANGRY like I ALWAYS DO when people call MY DAD.
Glory be Microsoft and all those who oppose her shall be slayed by my hand. I, the REAL DEAL NEIL.
Never cast Microsoft in ANY SHADOW as I will not tolerate OTHER OPINIONS other than MY OWN.
Neil.
Posted by Neil | February 18, 2007 11:25 AM
I wish I knew who this guy is who keeps on being a pain, not only that he has an identity crisis, someone take this poor s***head to the "loony bin".
In otherwords if you don't like waht I say... then have the guts to say it ...and under your OWN name as well !
The real Neil
P.S. Have I gotten under your skin that much hey ! Good !
Posted by Neil | February 18, 2007 10:48 PM