Microsoft Office – Play with fire

Microsoft needs to see the wood for the trees if it wants to maintain loyalty.

• Microsoft has changed the terms on which it sells Office 13.  
  • Firstly, users are no longer able to port Office onto a new PC whereas before one migration was allowed.
  • A user who replaces his PC or has to replace a large part of his system due to a crash will have to buy the software again.
  • This does not amount to a huge change as the Office licenses that are sold to companies are already tied to the hardware but those that are affected are those that are dangerous to annoy.
  • Secondly, Microsoft has quietly hiked the price of Office for Mac by 20%.
• In 2012, Enterprise represented around 80% of Microsoft’s revenues with 20% coming from individuals.
• Furthermore 75-80% of the Windows division’s revenue comes from OEM sales meaning that only the tiniest fraction of revenues come from people buying software online or off the shelf to then install.
• It is this slice that will be most affected by this change.
• Here, one finds the enthusiast market and it is this lot that write the blogs and review the products.
• Already they are not happy.
• There is also a case to be made for fair use. A user who buys a piece of software should not have to purchase the same software again simply because he or she has to replace the hardware.
• This move will encourage piracy. When EA released one of its games with exactly the same limitation, it rapidly became the most pirated piece of software in history.
• It will also encourage people to think about alternatives such as LibreOffice 4 or Google Docs.
• I suspect that a similar fate awaits Office 13 and as a result of this change, Microsoft will lose far more revenue than it could ever have gained from preventing installs on a second piece of hardware or price hikes.
• Microsoft is not in a position to annoy its customers or damage its image as there have never been more viable alternatives to its software than there are today.
• Its core market of PCs is being whittled away as users buy different devices, almost all of whom do not run Microsoft and from whom Microsoft makes nothing.
• This is a classic example of the ivory towers syndrome that infects Microsoft where each division does what it thinks best and no one really thinks about the whole.
• Somewhere in a back-room in Redmond some Office bod will have decided that this change makes sense for the Office business, but not for one second has that bod looked at the bigger picture.
• Microsoft has great assets but it needs to persuade its users to stay loyal not just trample over them in the mistaken belief that they have nowhere else to go.