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No savings with the Office 2010 Product Key Card

The new Office 2010 Product Key Card is a more expensive way to buy Office.

by Office Watch

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Part of the Office 2010 pricing regime is confirmation of a new way to buy Office: the Product Key Card. An innovative but more expensive way to buy Office.

The idea is simple – at a retail store you buy an Office 2010 Product Key (the 25 character code you enter during setup). The Office software is preinstalled on the computer, so there’s no CD/DVD.

The Product Key Card (PKC) looks like a ‘top up’ mobile phone or gift card you see in stores:

Sounds like a good idea. Microsoft has been quick to promote the ‘green’ credentials of the Product Key Card compared to a full retail box of Office with more packaging and a DVD.

In addition to that, Microsoft has presented the PKC in such a way that encourages a comparison with the retail package of Office 2010 with the same name. Various media have walked into this trap with talk of 20% or 30% discounts for the PKC which would have pleased Microsoft immensely.

Microsoft encourages a ‘like for like’ comparison of the retail box and Product Key Card options by presenting them ‘side-by-side’ and implying that you’re buying the same thing just in a different way.

But the two options, retail box and PKC, are quite different, with the latter being worse value.

As usual with a new Microsoft marketing initiative, always look at the fine print. With the PKC a look at all the details shows that it’s MORE expensive than buying the retail ‘boxed product’.

One license – not two or three

A standard retail purchase of Office 2010 gives you two licenses to install Office – one on a desktop and another on a portable computer. The Home and Student edition gives you three licenses to install Office in a home.

Buying the Product Key Card version of Office 2010 with the same bundle name (‘Home and Student’, ‘Professional’ etc) only gives you ONE install license.

For example, the retail package of Office 2010 Home and Student will retail for US$149 while the Product Key Card version with the same name is priced at $119. But the PKC version only lets you install Office 2010 on one computer, compared to the retail box of the same name which gives you three licenses. The PKC is 20% cheaper but you get 66% less! For true value the PKC version would have to be priced at one-third the retail version, at around US$50.

As they say in the UK – it’s ‘a nice little earner’.

Non-transferrable license

The Product Key Card not only sells you a single Office license but even that sole license isn’t directly comparable with a retail Office license.

The Product Key Card is a new way to sell the OEM license version of Microsoft Office. That’s the license for Office that’s sold with a new computer.

The PKC is marked as being for ‘1 preinstalled PC only’. Like the standard OEM license, you can only use the Office software on the preinstalled computer with no option to move it to another computer in the future.

As regular Office Watch readers might recall, the OEM license is different from the one you buy in a store. OEM copies of Microsoft Office are NOT transferable to another computer and only cover a single installation of Office.

Compare that to a retail purchase of Office which can be moved to another computer later and is for at least two installs of Office at any one time.

The ‘Green’ option?

Is the Product Key Card truly a ‘greener’ option for buying Microsoft Office?

It depends on what you’re comparing it with.

Certainly the PKC uses less packaging and shipping costs compared to a retail box. That is Microsoft’s basis for comparison.

But you can already buy an Office product key online for a preinstalled trial of Office – either from major computer makers or Microsoft direct. An online purchase uses even less packaging and shipping (ie none).

Customers will usually make their own copy of the install disk, at least they should. So the direct and indirect costs of the physical media are transferred from Microsoft to the customer. However there is the option to save the install files to a backup drive and avoid a silver disk install altogether.

As with many ‘green’ alternatives, the major benefits of the PKC are for Microsoft – not the end user or the environment.

More direct sales

The Product Key Card is another way for Microsoft to cut out the OEM computer makers and sell more directly to end users.

For a long time, Microsoft has been trying to get more of the revenue from sales of pre-installed copies of Office. With Office 2007 they introduced the option of buying an Office license online to ‘convert’ a pre-installed trial of Office – that online purchase could be made with the computer maker or Microsoft direct.

Now Microsoft has the Product Key Card which lets them sell what amount to Office OEM licenses through retail stores and bypass the computer makers entirely.

Article posted: Wednesday, 06 January 2010

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