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Office 365: Has Microsoft found the Golden Goose!

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Microsoft has released its new Office 2013 & Office 365. It’s new, it’s shiny and Microsoft wants you to not buy it. Strange as it may seem, but it is the real truth. Microsoft is tired of people buying its software and using it as much as they want.

New Office

Microsoft is tired of people paying huge amount for their Office, Home and Student versions without getting all the softwares and Microsoft is especially tired of people paying hundreds of dollars to them for just a span of three years (that is the life of Microsoft Office).

You do not believe me! Well, believe it or not. The truth is, Microsoft does not want you to buy its software but to pay for each month a nominal amount (Rs. 400 pm) and use the Office 365 (which has all the Pro features). This truly is a very small amount. Indeed, when added to it, the 20 GB Skydrive space and 60 Skype minutes along with the license for 5 users, this really seems like a sweet deal for Individuals and even more attractive for small businesses.

And Microsoft wants you to take it instead of buying the whole suite. This may seem counter-intuitive as far as price is concerned but it is a good business strategy if we see the advantage Microsoft will have in the long run.

Where, buying means that although a person gets the software for three years but there is no guarantee that he will buy the next version. In fact, most probably, home users can easily skip one generation. I can still see some people using 2007. They now will use 2013 and the 2010 version got completely skipped. People can also shift to other softwares like LibreOffice or go to web with much improved Google Docs.

Office 365 tackles with both. After people are hooked to Microsoft with their services they won’t go anywhere. People already love Office. Only reluctantly they leave it (maybe because of cost constraints or because they want web reliance). Now, they will have both, so there would be no reason for them to go anywhere else.

Also, because it is a monthly or yearly rent, people will also not feel the brunt so bad as to choose other options. I can already feel people flocking to it. Once, they have the whole package why would they want to go to any other service. Microsoft will have a loyal monthly paying base of customers. There is nothing more a company can ask for.

Another advantage is that Microsoft can now foresee their revenues in a better manner. Earlier, they could not effectively estimate how many they would sell in a month. Now, they have at least a lower bench set. Of course, who can or want can still buy the higher priced but sold Office 2013.

This means that Office now is in everyone’s reach practically. And knowing Office’s reputation I think even users of other softwares will have at least tempt to use this.

According to me, Microsoft has created a golden goose. It will keep laying golden eggs unless Microsoft ends up doing something to sabotage it.

What’s your take?

  1. Gaurav Jhamb says

    A valid argument but I feel it can backfire as well. When you buy a license, you expect it to stay valid for a longer period of time. A monthly subscription is too short to entice the customer. It would be like paying for your electricity bills, mobile bills or rent which unlike softwares are a necessity. With effective substitutes in the market, this can backfire on MS.

    And also I feel that MS Office is switching from a product model to a service model and thus want users to pay monthly. If its a service then there should be room for customisability. Why would I subscribe for the whole suite if I only need Word and Excel and dont intend to use Outlook, Groove and Publisher.

    And to your argument that 2010 version got lost so this strategy will work better I think by offering an incentive for switching over from old to new like half the cost for existing customers or something could have worked better. Monthly subscriptions for a non customizable service wont be much effective.

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