February 9th, 2010

Microsoft on Google Buzz: Been there, done that

Posted by Mary Jo Foley @ 12:41 pm

Categories: Corporate strategy, Google, Office, Office 2010/Office 14, SharePoint Server, Web 2.0, Windows Live

Tags: Google Inc., Microsoft Corp., Social Networking, Groupware, Online Communications, Marketing, Advertising & Promotion, Enterprise Software, Software, Mary Jo Foley

Google Buzz, which sounds like the slightly less confusing successor to Google’s “future of e-mail” Wave product, is coming in both consumer and enterprise flavors, according to Google. Are the Softies quaking in their boots?

Not exactly. I asked Microsoft officials for comment on Google Buzz, which Google unveiled on February 9.

I received a response attributable to Dharmesh Mehta, Director of Product Management for Windows Live:

“Busy people don’t want another social network, what they want is the convenience of aggregation. We’ve done that. Hotmail customers have benefitted from Microsoft working with Flickr, Facebook, Twitter and 75 other partners since 2008.”

(Not sure I’d call that statement a “slam,” like TechCrunch did… Felt to me more like attempted buzzzzzzkill.)

Microsoft also has been working to integrate social networks from third parties not just into its Web-mail product, but also into its Outlook mail client, via the Outlook Social Connector that the company unveiled at the Professional Developers Conference in 2009.

Microsoft is integrating the Social Connector into the Outlook 2010 product which is due out in the first half of this year. Microsoft’s Social Connector is designed to do a lot of what Buzz does, except with more of a business-centric focus.When Microsoft announced the Connector, there weren’t major providers on board (like Facebook, Twitter, etc.), but company officials did say Windows Live integration, unsurprisingly, would be happening in 2010.

Microsoft’s Social Connector also provides regularly updated “activity feeds” for those in a user’s social connector via a connection with SharePoint 2010.

(My ZDNet blogging colleague Larry Dignan blogged today that Google’s real target with Buzz was Microsoft SharePoint, not Twitter or FriendFeed. With the Social Connector front end taken into account, I wouldn’t say he’s far off the mark.)

In the longer term, Microsoft is working on infusing a lot of its products with more social networking capabilities. That’s a key piece of the mission of the recently created FUSE Labs at Microsoft, headed by Lili Cheng. Cheng, as Microsoft watchers may recall, has been working on the Social Desktop concept for a few years now….

Is Google actually chasing Microsoft’s taillights with Buzz — despite the lack of mentions of competitive offerings from Redmond by the majority of the press/bloggers covering today’s Buzz launch? What’s your take?

February 5th, 2010

Microsoft readies free upgrade program for Office buyers

Posted by Mary Jo Foley @ 5:33 am

Categories: Channel, Corporate strategy, OEMs, Office 2010/Office 14, Resellers, SharePoint Server, Windows client

Tags: Microsoft Office 2007, Microsoft Corp., Microsoft Office, Office Suites, Software, Mary Jo Foley

Just like it does with Windows to keep the bottom from dropping out of the market in the months prior to the launch of a new release, Microsoft does the same with Office via its Tech Guarantee program. It looks like that free-upgrade program is about to begin for Office 2010.

Ars Technica got a glimpse of a Microsoft partner’s blog post about the imminent launch of the Office 2010 Tech Guarantee program — just before the post was yanked. Here are some of the details (via Ars):

• The program runs between March 5, 2010 and September 30, 2010
• Customers who buy a copy of Office 2007 during that period — with or without a new PC — from a participating reseller will qualify for the promotion
• To qualify, customers must activate their copies of Office 2007 by September 30 and request their free upgrade to Office 2010 by October 31
• Those who are eligible will get a free download of Office 2010 (although discs will e purchasable for a shipping and handling fee)
• Limit is 25 free-upgrade copies per person

Microsoft is rapidly approaching the finish line with Office 2010 and SharePoint 2010. This week, Microsoft made the near-final Release Candidate (RC) of Office 2010 available to participants in its Technology Adoption Program (TAP). The company is not planning to make the RC more broadly available. Release to manufacturing could happen any time, but it’s likely this spring. Microsoft officials have said the final code will be available by June for sure. Microsoft execs said last year to expect SharePoint 2010 to be released alongside Office 2010.

Microsoft already has revealed the planned version line-up for Office 2010 (with seven different SKUs, the prices for most of which the company also has shared), as well as the system requirements for the final Office 2010 product.

February 2nd, 2010

Office 2010: RTM's getting closer

Posted by Mary Jo Foley @ 12:33 pm

Categories: Channel, Corporate strategy, Google, Office, Office 2010/Office 14

Tags: Microsoft Corp., Microsoft Office, Office Suites, Software, Mary Jo Foley

Yes, Microsoft officials have been saying Office 2010, the next version of the company’s desktop productivity suite, will be available by June 2010. But you know those under-promise/over-deliver-focused Office guys always like to beat their own deadlines. I’m expecting they’ll do it again this time around … and by more than a few months.

Microsoft is confirming this week that it has provided its Technology Adoption Program (TAP) members with the near-final Release Candidate of Office 2010. The company isn’t planning to provide any more public test releases of Office 2010, however. A spokesperson sent the following update:

“Microsoft made a release candidate available to members in the technology adoption program (TAP). This is one of Microsoft’s planned milestones in the engineering process; however they do not have plans to make this new code set available broadly.”

Distributor Ingram Micro also has begun inviting select reseller partners to a March 1 “launch event” for Office 2010 at a Microsoft office in Canada. A “launch” can mean a lot of things in Microsoft’s world. Sometimes the company launches products and later ships them; sometimes it uses “launch” to refer to the kick-off of marketing and training activities. But given various reports of possible Office 2010 escrow builds in the wild, I wouldn’t be surprised to see Office 2010 be released to manufacturing sooner rather than later.

From the Ingram invitation (a copy of which one reader shared with me):

“Now easier to sell, Microsoft Office 2010 helps you grow your revenue, increase profitability, and meet evolving customer demands.  With a streamlined product line and easier sales process, Office 2010 helps save you time, effort, and money by reducing complexity and shortening sales cycles for the world’s most popular productivity suite.”

I’d be interested to hear what tricks Microsoft has up its sleeve to shorten the Office 2010 sales cycles, at a time when competition is up, and economic pressures are preventing many businesses from upgrading… I’d expect Office Web Apps, the Webified versions of Word, Excel, PowerPoint and OneNote, to play a big part in the campaign. (Speaking of OWA, check out this nifty chart I found on one Microsoft blogger’s site, which compares what Office 2010’s locally installed Word, Excel, PowerPoint and OneNote will provide, feature-wise, vs. Office Web Apps.)

Microsoft officials aren’t changing their public Office 2010 timing guidance. They are continuing to say that Office 2010 will be available by June 2010.

In related news, was I the only one who thought it odd that almost none of the recent reports about Google possibly launching an apps store for third-party products that will work with Google Apps mentioned Microsoft?

Microsoft already offers free add-ons and templates to Office from third-party vendors via the Office Online site. That same site also features a marketplace of paid third-party apps and services that complement Office. Microsoft and Intuit recently announced a deal via which users will be able to access hosted small-business productivity apps via Intuit’s App Center marketplace.

January 28th, 2010

Earnings take-away: Microsoft is still powered by Windows

Posted by Mary Jo Foley @ 3:47 pm

Categories: Channel, Corporate strategy, Office, Office 2010/Office 14, Windows 7, Windows client

Tags: Revenue, Microsoft Corp., Earnings, Microsoft Windows 7, Microsoft Windows, Sales Strategy, Sales Force Management, Operational Accounting, Operating Systems, Software

Microsoft’s brass is always looking for the next billion dollar business and has stuck a toe into everything from healthcare to energy monitoring. But as the company’s second quarter earnings for fiscal 2010, which Microsoft released on January 28, show, Windows is still the big wheel that keeps on turning in Redmond.

Consumer sales of Windows 7 buoyed Microsoft to report record earnings, even after deferrals were figured in. Microsoft reported net income of $6.66 billion, or 74 cents a share, on revenue of $19.02 billion, which included $1.71 billion in Windows 7 deferred revenue for the quarter.

As part of that announcement, Microsoft reported that it has sold more than 60 million Windows 7 licenses to date. The combined Windows and the Windows Live division had operating income of $5.39 billion on revenue of $6.9 billion, compared to the year-ago quarter’s operating income of $2.71 billion on revenue of $4.06 billion.

Business sales of Windows 7 — unsurprisingly, given typical enterprise sales, testing and deployment cycles — have yet to kick in for Windows 7. That isn’t because business users are waiting for Windows 7 Service Pack (SP) 1, which is widely expected to ship some time this calendar year, Microsoft officials said. In fact, Microsoft is seeing more business activity around upgrades to the latest version of Windows than it has with previous launches, according to Microsoft’s new Chief Financial Officer Peter Klein.

“People want Windows 7 on all devices on all form factors,” said Klein during today’s call with Wall Street analysts. (In case you were wondering, that question wasn’t prompted by a question about the Apple iPad. Nobody asked about it during the Q&A session.)

Klein noted that netbooks currently comprise about 11 percent of the PC market and Windows is currently on 90 percent of these machines. Windows 7 is more than half of that base (XP, and to a much lesser extent, Vista) are on the rest of the Windows netbooks.

Yes, Office is still the other big Microsoft cash cow (with revenues of $4.74 billion for the Business Division this quarter), and that unit ended up really kicking in for Microsoft when the economy and Vista sales were down. But in Q2, Business Division revenues and operating income were both down, compared to the year-ago quarter. Microsoft officials attributed the decline, in part, to the imminent arrival of Office 2010. (Office sales comprise more than 90 percent of the Business Division’s revenues; Dynamics products are the other 10 percent.)

(Detailed breakdowns for each division can be found in Microsoft’s latest 10-Q, filed on January 28.)

Server and Tools held its own (revenues up two percent, primarily because of Enterprise Client Access License (CAL) suites, System Center and SQL Server). But services/consulting revenues were down two percent, or $32 million. The Online Services Division (the search/advertising unit) is still in the red. Online access (dial-up) continues to plummet, and online advertising was off. In Entertainment and Devices, gaming console and game sales were down, but Xbox Live revenues were up.

Here’s a more detailed breakdown by division of revenue and operating income (click on the image below to enlarge).

Microsoft cut 800 jobs in the second quarter of FY 2010 and spent $59 million in severance payments. No analyst on today’s call asked whether there would be more layoffs planned for this year. The Softies did say they planned to continue to keep a tight rein on costs. While the Windows division spent more than usual on sales/marketing because of Windows 7 launch-related activities and ads, other divisions cut back on not just headcount, but also sales and marketing, as well as research and development expenses.

January 22nd, 2010

Microsoft Office 2010 system requirements: Changes in disk space, GPU recommendations

Posted by Mary Jo Foley @ 11:48 am

Categories: App Compatibility, Channel, Corporate strategy, Office, Office 2010/Office 14

Tags: Microsoft Office 2007, Disk, Microsoft Corp., GPU, Microsoft Office, Office Suites, Software, Mary Jo Foley

Via a January 22 blog post, Microsoft is providing more details about the system requirements for its Office 2010 suite, due out by June 2010.

The bottom line: If your PC can run Office 2007, it will be able to run Office 2010. If you just acquired a brand new PC, it also will be able to run the forthcoming suite. But if you’re using Office 2003, there are no guarantees you’ll automatically be able to run Office 2010 on the same hardware.

The 32-bit version of Office 2010 will run on the following 32-bit operating systems: XP with Service Pack (SP)3, Vista SP1, Windows 7, Windows Server 2008 and Windows Server 2003 R2 (with MS XML). The 64-bit version will run on on 64-bit versions of all of these same operating systems, with the exception of Windows Server 2003 R2.

CPU and RAM requirements approximately doubled between Office 2003 and Office 2007, blogged Alex Dubec, a Program Manager on the Office Trustworthy Computing Performance team. The minimum system recommendations (for being able to perform average Office tasks relatively quickly) for Office 2003 specified a 233 MHz processor and 128 MB of RAM. For Office 2010, the suggested minimum requirements are a 500 MHz processor and 256 MB of RAM.

The disk-space requirements for Office 2010 are somewhat greater than for Office 2007 or Office 2003. Dubec noted that the footprint of most Office apps has gotten larger. As a result, “most standalone application disk-space requirements have gone up by 0.5 GB and the suites have increased by 1.0 or 1.5 GB,” he said.

“New features mean more code,” Dubec explained. The introduction of 64-bit Office, an Office-wide Ribbon implementation, inclusion of OneNote in more versions of the Office 2010 offerings, and the optional free trial versions of Pro 2010 apps in the retail boxed version of Office 2010 all add to the total disk space requirements.

In addition, Office 2010, unlike Office 2007, has a GPU requirement in order to speed up graphics rendering of charts in Excel or transitions in PowerPoint. Microsoft designed Office 2010 to assume a minimum Microsoft DirectX 9.0c compliant graphics processors with 64 MB video memory, which Dubec characterized as fairly minimal. He noted Office 2010 will still work on PCs without a standalone GPU like the one described.

Dubec offered more details in his post on the Office Engineering blog:

“One of the pieces of feedback we’ve received from customers is that they really, really hate having to buy new hardware every time a new version of Office is released. With that in mind, one of our goals for the Office 2010 was to make sure that the minimum hardware requirement would not increase from Office 2007. We invested in improving the customer experience on minimum-requirement hardware, and we regularly tested performance throughout the development cycle. Our footprint has gotten larger since Office 2007, but we’re proud to say that we’ve succeeded in keeping the CPU and RAM requirements the same as for Office 2007.”

Anything in the Office 2010 requirements details triggering any alarms (or relief)?

January 11th, 2010

Microsoft pulls Office from distribution channels on patent-infringement deadline day

Posted by Mary Jo Foley @ 4:47 pm

Categories: App Compatibility, Apple, Channel, Corporate strategy, Legal, OEMs, Office, Office 2007, Office 2010/Office 14, Office for Mac, Resellers, System builders

Tags: Microsoft Corp., Microsoft Word, Microsoft Office, Word Processors, Office Suites, Software, Mary Jo Foley

January 11 is/was the day by which Microsoft was required to stop selling versions of Office or components of it that included the Custom XML technology, as a result of a patent-infringement ruling against the company.

Given that Microsoft released to PC makers a patch designed to remove the infringing technology at the end of last year, it looked like the Softies were ready to comply with the ruling over a month ago. But on or just before the actual compliance deadline, Microsoft ended up pulling existing copies of Office that included the technology from its various distribution channels and sites, including the Microsoft online store, MSDN and TechNet.

The products pulled/removed included various Office 2003, Word 2003, Office 2007 and Word 2007 SKUs. Microsoft officials told various blogs that the company planned to make available updated versions of these products soon via these same distribution outlets, but didn’t provide an exact date. Computerworld noted that Microsoft provided a patch  Word 2003 over the weekend via its download center, advising Office 2003 customers to apply it. Computerworld also said Microsoft is planning to patch Word 2004 and Word 2008 for the Mac as part of the i4i ruling. (I asked Microsoft to verify this list of affected products on January 11. So far, no word back.)

Update (January 12): This just in from a Microsoft spokesperson with the Office team. The full list of products Microsoft is updating as a result of the i4i ruling is:

Word 2003 and Word 2007
Office 2003 Professional edition
Office 2007 all versions
Mac Office 2008
Word for Mac 2008

All of these are in the process of being updated, the spokesperson said. “They are uploaded as they are done.  If you go to the (Microsoft) Store page, Office 07 Home and Student, Professional, Ultimate, Mac Office 2008 for business are all available now,” he added.

I wonder whether Microsoft officials were so convinced that the patent-infringement verdict against the company was going to be overturned that they didn’t have a “Plan B” in place to patch Office in time for the court-set deadline. Either that or some at the company wanted to show just how disruptive the i4i ruling would be by making Office/Word unavailable for a while. (Yes, that sounds like a tin-foil-hat conspiracy theory, but such a move wouldn’t be unprecedented. Look what happened with Windows 7E, the browserless version of Windows 7 that Microsoft nearly foisted on European users to make a point…)

Here’s Microsoft’s officials statement on what it’s doing, courtesy of Michael Croan, Sr. Marketing Manager, Microsoft Office”

“We’ve taken steps to comply with the court’s ruling and we’re introducing the revised software into the U.S. market. This process will be imperceptible to the vast majority of customers, who will find both trial and purchase options readily available.

“We’ve modified Microsoft Word and are in the process of introducing the new software into our distribution channels. The process won’t take long, and in the meantime customers outside the U.S. still have all of their online purchase options available. In the U.S., Office Ultimate, the Home & Student suite and Office Professional are already available for online purchase and download, and the other suites are available retail outlets.”

In December, Microsoft lost its appeal of a patent-infringement case involving Custom XML technology that was instigated by Toronto-based i4i. Late last week, Microsoft officials requested a rehearing, claiming that the $290 million or so ruling against the company was “egregiously excessive.”

January 8th, 2010

From the Microsoft licensing crypt: New Office Web Apps details unearthed

Posted by Mary Jo Foley @ 8:41 am

Categories: App Compatibility, Corporate strategy, Google, Office, Office 2007, Office 2010/Office 14, Office Live, Office Live Workspace, SharePoint Server

Tags: Web Application, Microsoft Corp., Office Web Apps, Microsoft Office, Cloud Computing, Office Suites, Software, Mary Jo Foley

Microsoft hasn’t yet provided pricing or licensing specifics about the paid version of its Office Web Apps offering that it is readying as part of its Office 2010 wave. But the analysts at Directions on Microsoft have unearthed a couple of interesting tidbits by combing through Microsoft’s licensing documents.

First, a quick recap re: Office Web Apps. Office Web Apps is Microsoft’s first real foray into the Web-based producivity space that’s the stomping grounds of Google, Zoho, etc. We already know there is going to be a free, ad-supported consumer version of Office Web Apps — the Webified version of Word, Excel, PowerPoint and OneNote. Microsoft is planning to make this version available to anyone with a Windows Live Skydrive account. The Softies also have said there is going to be a paid, subscription-based version of Office Web Apps for business users that will require SharePoint access. That version will be available as a Microsoft-hosted service and/or for companies to run themselves on-premises. (This business version of Office Web Apps is what Microsoft made available to interested testers as part of Office 2010 Beta 2.)

Here’s a potential scenario: You buy Office 2010 Standard or Professional Plus, which includes rights to use the paid version of Office Web Apps. You’re on the road without your PC and want to use Office Web Apps from a kiosk, a hotel computer or a mobile device. Will you be able to do so without having to purchase additional Office licenses?

“We badgered them (Microsoft) for a month to explain this, which they never did, but the use rights document does,” said Directions on Microsoft analyst Paul DeGroot. Buried inside the 200-page January 2010 Microsoft Product Use Rights (PUR) document is the answer.

“If your computer (somewhere in the world) is licensed for Office 2010, then you can use the (paid) Web Apps,” DeGroot said. “In this case you are the ’single primary user of the licensed device.’ Also, anyone sitting at your licensed device (aka ‘non-primary user of the licensed device’) can also access Office Web apps. So it’s a hybrid of user and device licensing.”

I’ve also been wondering whether Microsoft will offer the paid Office Web Apps subscription to users who don’t want to buy the corporate versions of Office 2010. What if you’re an Office 2007, Office 2003 user who wants Office Web Apps access?

“There is no option (or, at least none reveals so far) for corporate customers to purchase just the right to host Office Web Apps internally, without buying the ‘thick client’ licenses,” said Directions on Microsoft analyst Rob Horowitz.

But Office 2010 users definitely should have the right to access Office Web Apps remotely, Horowitz reiterated.

“If your work PC is licensed for Office 2010, you  (’primary user’) can use Office Web Apps from any device. This was an important point of clarity, especially since folks away from their desk who access SharePoint 2010 remotely are likely going to be using Office Web Apps to view docs… and they need to be properly licensed.”

Directions on Microsoft is offering licensing boot camps for customers interested in these kinds of licensing questions and details. There’s one at the end of January in San Francisco and another in April in Washington, D.C. More info on those two-day events can be found here.

January 8th, 2010

Forrester warns of possible Office 2010 upgrade hassles

Posted by Mary Jo Foley @ 6:47 am

Categories: App Compatibility, Channel, Corporate strategy, Google, Office, Office 2010/Office 14

Tags: Forrester Research Inc., Microsoft Office, Office Suites, Software, Mary Jo Foley

Forrester Research released a new study this week that warned of some potential upgrade hassles for business users looking at Office 2010, due out by June of this year.

The January 7 study, entitled, “A Glimpse At The Best And Worst Of Office 2010″ is based on feedback from “dozens” of information worker and knowledge management professionals. Forrester’s study acknowledged there will be many “incremental” improvements to Office, but also potential challenges.

In a section on potential Office 2010 “speed bumps,” Forrester analysts mention the following:

• Differences between 32- and 64-bit versions of Office. “There are clear benefits to running the 64-bit version of Office 2010 — like much larger Excel workbooks — but it’s not without drawbacks,” Forrester said. One example: ActiveX controls and add-in (COM) dynamic link libraries (DLLs) that were written for 32-bit Office will not work in a 64-bit process, Forrester said.
• The “makeover” of the VBA language and Office Object Model. VBA will support 64-bit with Office 2010 and the Object Model has been updated with the forthcoming release of Office — something which affects Outlook users. “Customers who wish to do bulk conversions or migrate content with macros and other customization may need to spend more effort for remediation,” Forrester analysts said.
• Integrations may be “clunky.” From the study: “Because Microsoft needed to reengineer Groove to work as SharePoint Workspace and features like Outlook Social Connector are brand new, the initial experience using these features likely won’t be seamless.”

Forrester noted that Microsoft has work to do to convince customers why Office still merits premium price points, given the raft of free competitive offerings out there. (Earlier this week, Microsoft unveiled retail prices for Office 2010, which included a brand-new $99 SKU for students, but higher prices for those looking for upgrades. Microsoft hasn’t shared volume-licensing price guidance for Office 2010, but it is offering small business users who are willing to sign up for annuity licensing plans a discount for upgrading.)

Forrester noted that some customers are looking at mixing and matching Office with free offerings. From the report:

“Several firms Forrester spoke with indicate they will continue to license Office but plan to move segments of their workforce to alternatives or provision online apps from Google or Zoho as a complement. Volume licensing pricing will matter if firms can demonstrate that cost per user for broad deployments can be competitive with cloud-based alternatives whose enterprise pricing is still under development.”

Office 2010 testers: What’s on your potential list of hurdles, price- or feature-wise, if you’re contemplating moving to the latest Office release?

January 5th, 2010

Microsoft rethinks, reveals prices for its Office 2010 SKU line-up

Posted by Mary Jo Foley @ 7:30 am

Categories: Channel, Corporate strategy, Office, Office 2010/Office 14

Tags: Microsoft Outlook, Microsoft Office OneNote 2003, Product Key, Microsoft PowerPoint, Microsoft Corp., Microsoft Office, Office Suites, Software, Mary Jo Foley

Microsoft is adding one new version to its line-up for Office 2010, a “Professional Academic” SKU that includes Outlook, as rumored late last year. The company also is sharing its planned retail pricing for the suite.

Microsoft unveiled on January 5 its latest iteration of its Office 2010 line-up. The now-four retail SKUs include:

A new Office Professional Academic version. It will be sold through retailers and campus bookstores. This SKU is for “qualified students and educators.” It will include Word 2010, Excel 2010, PowerPoint 2010, OneNote 2010, Outlook 2010, Publisher 2010, Access 2010, and Office Web Apps (the free, consumer-focused version of Microsoft’s Webified version of four of its Office apps). Pricing $99

Office Home and Student. It will include Word 2010, Excel 2010, PowerPoint 2010, OneNote 2010 and Office Web Apps. This version can be run as a Family Pack style, with usage allowed on three PCs in one house. Pricing is $149 (boxed) or $119 (product key card).

Office Home and Business. This version is for small businesses or those who work at home, according to the Softies. It includes Word 2010, Excel 2010, PowerPoint 2010, OneNote 2010, Outlook 2010 and Office Web Apps. It costs $279 (boxed) or $199 if purchased using a Product Key Card.

Office Professional. It comes with Word 2010, Excel 2010, PowerPoint 2010, OneNote 2010, Outlook 2010, PUblisher 2010, Access 2010, Office Web Apps and premium technical support. It will sell for $499 (boxed), or $349 (Product Key Card).

As my blogging colleague Zack Whittaker noted in December, based on some leaked box shots of Office 2010, the addition of Outlook to the new Professional Academic version should be a welcome one for students. The current Office Home and Student wasn’t really geared toward university students, Whittaker argued. Whittaker has more info today about how Microsoft plans to “qualify” those who are eligible for the new Academic version.

There are two other Office 2010 SKUs not mentioned in today’s line-up that Microsoft officials discussed last summer –  the Professional Plus and Standard SKUs. The SKUs and pricing in today’s announcement seem to include only those products available at retail and not those also available to volume licensees, but I’ve asked Microsoft to be sure that the company is still planning to roll out these other two SKUs.

Update: Yes, the other two SKUs (Pro Plus and Standard) seem to still be on the docket. And there’s also “Office Starter 2010 Edition,” which is the replacement for Microsoft Works, and an OEM-only SKU, still in the wings, as well…. So I guess that means we’re technically at seven SKUs, just one short of the eight that Microsoft offered when it introduced Office 2007.

Update No. 2: As Gregg Keizer at ComputerWorld figured out, Microsoft is not going to be offering Upgrade pricing, as of Office 2010. According to Keizer’s calculations, the Product Key Card (which seems to be the replacement to an Upgrade SKU) is somewhat more expensive than Upgrades. Kind of a surprising move, when pressure on Microsoft from its free, Web-based competitors to Office would seem to point to the need for Office price cuts, not increases….

Update No. 3: Even more Upgrade pricing comparisons and other related info from my ZDNet blogging colleague Ed Bott.

January 4th, 2010

Microsoft offers Windows XP, Office XP users 50 percent discount to encourage upgrades

Posted by Mary Jo Foley @ 7:41 am

Categories: Channel, Corporate strategy, OEMs, Office, Office 2007, Office 2010/Office 14, Resellers, System builders, Systems integrators, Vista, Windows 7, Windows XP, Windows client

Tags: Microsoft Windows XP, Microsoft Office XP, Microsoft Corp., Microsoft Office, Microsoft Windows, Office Suites, Software, Operating Systems, Mary Jo Foley

Microsoft officials are well aware that its biggest Windows 7 and Office 2010 competitors are its own previous product iterations (Windows XP and Office XP/2003). To try and wean users away from older, “good-enough” releases, Microsoft is introducing a new licensing promotion.

The revamped “Up to Date Discount” program is targeted at small/mid-size business (SMB) customers running older versions of Windows and Office. Between January 1 and June 30 of this year, Microsoft is enabling users running Windows XP or Vista (on the operating system side) and Office XP, Office 2003 or Office 2007 (on the productivity suite side) to receive a discount of 50 percent on the cost of their licenses for Windows 7 and Office 2007 (or Office 2010, once it is released by June 2010).

The 50% discount calculations “are based on estimated retail prices and reseller prices may vary,” Microsoft officials acknowledge. But the Softies say U.S. customers who sign up for the program “would be paying $35.00 for a Windows 7 Professional Upgrade and/or $91.00 for Office 2007 Professional Plus in year 1, plus receiving all of the Software Assurance benefits (such as an automatic upgrade to Office 2010 when it launches, Office Home Use Rights, and much more) for that price.”

As you’d expect, there are lots of caveats. First,customers get the 50 percent discount only for the first year of their Open Value Subscription (OVS) payment. (OVS is a Microsoft licensing program, introduced last year for SMBs, which allows users to pay for software licenses over time and includes many of the same provisions as Microsoft’s Software Assurance licensing program.) The new deal applies only to those customers using the Professional versions of Windows and/or the Professional versions of Office.

The new promotion, which Eric Ligman, Global Partner Experience Lead with Microsoft’s Worldwide Partner Group, announced via the Microsoft SMB Community Blog on January 1, goes beyond the current Up-to-Date Discount offer. Before the new so-called “N-2″ update to the program was put in place, Windows XP users and Office XP users were ineligible for the discount. But Microsoft is now offering users of the older Windows and Office releases coverage if they’re willing to sign up for the Open Volume Subscription plan.

Meanwhile, speaking of new Microsoft licensing promotions, Microsoft is introducing “version 4.0″ of another SMB promotional licensing offer, known as “The Big Easy,” according to Ligman.

Starting January 3, SMB customers can increase dollars available for them to spend with Microsoft partners  “by purchasing multiple qualifying product groups, adding Software Assurance to their orders and/or acquiring advanced, premium or Enterprise editions of the MIcrosoft Solutions.” To qualify, customers need to buy products through their Microsoft partners between January 3 and March 31 via the Microsoft Open License, Open Value and/or Open Value Subscription programs.

Products included under the program include Dynamics CRM, Office Communications Server, SharePoint Server, SQL Server, Systems Center and Windows Server, among others.