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Why no upgrade price for Office 2010?

Why does Microsoft expect loyal customers to pay more for Office 2010?

There are various theories about why Microsoft has dropped the upgrade discount for Office 2010 ranging from the silly to the more plausible.

The silly excuses come from Microsoft itself. At the launch of Office 2010, a Microsoft executive said that reason was two-fold – most customers bought Office with a new computer and customers were confused by the different options and no upgrade packages made it easier for customers to understand. You could hear the sniggers around the room.

It may be true that many customers by Microsoft Office with a new computer, even though it’s not always the cheapest option available. The fact that Microsoft gets a lot of OEM sales is partly because of the convenience to unsuspecting customers as well as the special OEM licence for Office which sells only one install of Office (rather than 2 or 3 with retail sales of software with the same name). If someone buys Office with a new computer, they have to buy another Office with their next machine.

A more plausible reason is in the byzantine rules of volume licensing. Without an upgrade option, more companies will have to switch to the Software Assurance licence option. That will suit Microsoft very nicely.

Meantime, despite the efforts of Google, OpenOffice and others, Microsoft Office is the overwhelming choice for most people. Gartner says that Microsoft Office has a whopping 94% of the office software market and consumer sales are still very strong despite economic woes and the low-cost rivals.

So the main reason for Microsoft dropping the upgrade option for Office 2010 is simply that they can. The company is betting that people will buy Microsoft Office as long as the price isn’t too high. There is no reason to give a discount to existing Office customers because they’ll buy Microsoft Office anyway.

As with any price and bundle changes with Microsoft Office, the main aim is to increase Microsoft’s revenue from sales. That’s the way capitalism works and Microsoft would have more credibility (and less sniggers) if they dropped the disingenuous excuses and simply admitted that they want to make money.

Meantime it’s up to customers to find ways to get Microsoft Office without paying too much – that’s what is all about.

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