Microsoft cuts Office versions and pricing options for 2010

The offering has been simplified, but the lack of discounted pricing for upgrades from earlier Office versions could hurt sales

So Microsoft has released pricing and edition information for the forthcoming Office 2010 suite. The upshot? Two fewer editions (three, versus five editions of Office 2007), one new wrinkle ("key cards" for upgrading pre-installed Office 2010 software), and, perhaps most disturbingly for end users, no more discounted upgrade license for owners of earlier MS Office software.

The three generally available editions are Home and Student, Home and Business, and Professional, and they're priced at $149, $279, and $499, respectively. (There is a fourth version, Professional Academic, which is only available to students, teachers, and academic faculty, can only be installed on one machine, and costs $99.) Home and Student is the base version of the suite and includes Word, Excel, PowerPoint, and OneNote; Home and Business adds Outlook to the mix, while Professional adds Publisher and Access as well as Outlook.

[ InfoWorld's Randall C. Kennedy was not impressed with Office 2010, citing the bad UI and sluggish performance as his chief issues. ]

As for the key cards, they are Microsoft's way of grabbing some extra money off the Office Starter mini-suite that will be pre-installed on new PCs. They're single-license codes that will allow users to turn Office Starter into Home and Student, Home and Business, and Professional at a discounted rate ($119, $199, and $249 respectively).

But while Microsoft opens one upgrade door, it closes another. Specifically, the upgrade option for users of earlier Office versions is gone. No more. No discounted upgrade for you! You want the new Office suite? You'll have to buy it new like everybody else.

Microsoft says the decision to dump the upgrade option came from market research. A Microsoft spokesperson said, "When it came to upgrade pricing, we looked at how people are using and buying Office and found two things: First, not a lot of people were buying the upgrade, and second, when people do buy a new version of Office they do it with the purchase of a new PC."

Still, it's not hard to see how the lack of discounted upgrades could take a bite out of Office 2010's sales. Office is already facing competition from free alternatives like Google Apps and OpenOffice.org, which supports MS Office file formats. Granted, neither of these options has taken a big bite out of Office's market share thus far, but Microsoft could be presenting an opportunity for them to do just that.

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