5 ms·

Microsoft relies on Office piracy as a strange means of price discrimination. The product requires network effects to maintain its near-monopoly position in th

Microsoft relies on Office piracy as a strange means of price discrimination. The product requires network effects to maintain its near-monopoly position in the corporate world, and having a significant portion of people in "document sharing" networks say, "I don't have Office" is a threat. So, what Microsoft's quietly made decision says to me is that they are worried that a sufficiently large enough portion of computer users were both unwilling to pay for Office and unwilling to bother pirating it. On Black Friday, many online retailers were running specials on a Home/Student Office "Family Pack" -- three legal installs for $100. This is a midpoint between the corporate price point and free. Perhaps an attempt to introduce another segment? I recall the availability of home/student editions in the past, but the price points were always much higher.

sliverstorm 16y ago
I think Microsoft is attempting to target students more aggressively, perhaps because of the appearance of other cheap/free options on the market in recent years. Just last year Office 2007 was on sale to students at $60.
- iends 16y ago
  The university my wife attends (in the USA) has some kind of weird site license where students get it for free from the IT department if they are willing to drop off their laptop with the university. (This isn't a bad deal, since probably the average freshman also buys their laptop from the university anyway). They can pay $10 to get the DVD themselves. (This is a very large state supported school.) My school (even larger and state supported) charges like $92 for the same thing. I've not figured out why two almost identical schools about 20 miles apart have such a different pricing scheme for their students. I do know that in our relationship, my wife buys all the software. :)
  - MrRage 16y ago
    I attended two state Universities in Texas, and both had cheap licenses like you describe. I don't think it's so weird.
  - steveklabnik 16y ago
    They just hand them out here. And Windows Vista Ultimate.
  - jf 16y ago
    The difference in pricing is likely due to the schools participating in different programs. Feel free to reach out to me if you're interested in seeing your school have a similar program as the one your wife attends. I would be happy to put you in touch with someone who'll know more about that topic than I do.
- ugh 16y ago
  My university in Germany offers all students all somewhat current versions of Windows for free (including Windows 7 Professional), you can download it as often as you want and generate a ton of keys. It would actually be more useful for me if they offered Office but they don’t. You can get Office for less than 100€, though.
  - beaumartinez 16y ago
    Any student with a cooperating higher-education centre can get loads of free Microsoft software (of notability, VS 2010, Expression Studio 4) through DreamSpark[1] as well as getting Office for a huge discount[2] (at least in the UK). [1] https://www.dreamspark.com/default.aspx https://www.dreamspark.com/default.aspx [2] http://store.digitalriver.com/store?Action=DisplayStudentHeroRegistrationPage&Locale=en_GB&SiteID=msshgb http://store.digitalriver.com/store?Action=DisplayStudentHer...
    - bsk 16y ago
      Also anyone can register as student member in IEEE for $19 and get access to e-academy MSDN.
Tangurena 16y ago
Our corporate parent has some sort of deal with Microsoft that lets you purchase a legit copy for $10 (total with shipping and sales tax is about $27 if you want the DVD delivered). The folks at the office (who have taken advantage of it) mention that they've also been allowed the 3-machine activation per key.
- arethuza 16y ago
  Sounds like an Enterprise Agreement - they are pretty standard for larger organizations. They seem to come with Home Usage licenses which were described to us as "free" but with a £10 delivery cost for the download!
  - omh 16y ago
    From my brief conversations about Office licenses, I think that the Home Usage licenses are a side effect of the per-machine licensing policy for Office. Microsoft explicitly say that you need an Office license for the machine that you're sat at while running it, so if you're accessing a Citrix server from your home PC then that home PC needs an Office license (even if it's not running Windows). That means that the sort of places buying Enterprise agreements, with large VPNs, need a license for all of the PCs at home. So these basically come bundled once you're buying enough. I assume that the £10 cost is just for the media (rounded up a little!). We never got as far as offering this to our users though.
  - Tyrannosaurs 16y ago
    A lot of companies avoided these as originally MS made the company liable for ensuring that the software was uninstalled from the home machine when the individual left the company. As a result the companies said screw that and just never made it available to staff (rightly working out that there was no way that could make that guarantee). I believe that this restriction has been lifted now though so some may revisit it.
    - arethuza 16y ago
      We were told that it was the individuals responsibility - with there being a clear hint that they didn't care.
evgeny0 16y ago
+1 Perhaps it's their way of dealing with the fact that Office is just too expensive for many people, without acknowledging that to the public by dropping the price. People who don't use Office for business would struggle to justify $209 AUD (RRP for Home and Student edition) to themselves just to write the occasional letter - even if they're not aware of Google Docs or other alternatives.
jl6 16y ago
There is one important network effect they seem to be neglecting - the "big ball of mud" network effect of having hundreds of Excel spreadsheets all linked into each other, forming critical parts of the finance infrastructure of megacorps. This kind of end-user-computing nightmare is so hard to migrate away from that most companies can't even conceive how to do it. However, regulatory schemes like SOX in the USA and Solvency II and Basel III in Europe, are forcing the issue. Big banks and insurers won't be allowed to carry on running critical finance operations on such a fragile stack, so there are currently huge migrations away from Excel happening all across the financial services industry. Software like SAS and Business Objects seem to be the anti-Excels of choice. There will obviously still be Excel on the desktop, used for ad-hoc data manipulation and visualization, which is what it is actually good for, but this type of usage is much easier to replace with something like OpenOffice.
- Tyrannosaurs 16y ago
  My experience is that corporates have no great desire to migrate away from Office though. Finance users will insist (with some justification) that OO Calc isn't as good as Excel, the training department will point out reskilling costs for all the admin staff, the senior managers won't be keen to move away from PowerPoint which they all know and all of a sudden a few hundred quid a head will seem not worth saving.

sliverstorm 16y ago

I think Microsoft is attempting to target students more aggressively, perhaps because of the appearance of other cheap/free options on the market in recent years. Just last year Office 2007 was on sale to students at $60.

iends 16y ago
The university my wife attends (in the USA) has some kind of weird site license where students get it for free from the IT department if they are willing to drop off their laptop with the university. (This isn't a bad deal, since probably the average freshman also buys their laptop from the university anyway). They can pay $10 to get the DVD themselves. (This is a very large state supported school.) My school (even larger and state supported) charges like $92 for the same thing. I've not figured out why two almost identical schools about 20 miles apart have such a different pricing scheme for their students. I do know that in our relationship, my wife buys all the software. :)
- MrRage 16y ago
  I attended two state Universities in Texas, and both had cheap licenses like you describe. I don't think it's so weird.
- steveklabnik 16y ago
  They just hand them out here. And Windows Vista Ultimate.
- jf 16y ago
  The difference in pricing is likely due to the schools participating in different programs. Feel free to reach out to me if you're interested in seeing your school have a similar program as the one your wife attends. I would be happy to put you in touch with someone who'll know more about that topic than I do.
ugh 16y ago
My university in Germany offers all students all somewhat current versions of Windows for free (including Windows 7 Professional), you can download it as often as you want and generate a ton of keys. It would actually be more useful for me if they offered Office but they don’t. You can get Office for less than 100€, though.
- beaumartinez 16y ago
  Any student with a cooperating higher-education centre can get loads of free Microsoft software (of notability, VS 2010, Expression Studio 4) through DreamSpark[1] as well as getting Office for a huge discount[2] (at least in the UK). [1] https://www.dreamspark.com/default.aspx https://www.dreamspark.com/default.aspx [2] http://store.digitalriver.com/store?Action=DisplayStudentHeroRegistrationPage&Locale=en_GB&SiteID=msshgb http://store.digitalriver.com/store?Action=DisplayStudentHer...
  - bsk 16y ago
    Also anyone can register as student member in IEEE for $19 and get access to e-academy MSDN.

Tangurena 16y ago

Our corporate parent has some sort of deal with Microsoft that lets you purchase a legit copy for $10 (total with shipping and sales tax is about $27 if you want the DVD delivered). The folks at the office (who have taken advantage of it) mention that they've also been allowed the 3-machine activation per key.

arethuza 16y ago
Sounds like an Enterprise Agreement - they are pretty standard for larger organizations. They seem to come with Home Usage licenses which were described to us as "free" but with a £10 delivery cost for the download!
- omh 16y ago
  From my brief conversations about Office licenses, I think that the Home Usage licenses are a side effect of the per-machine licensing policy for Office. Microsoft explicitly say that you need an Office license for the machine that you're sat at while running it, so if you're accessing a Citrix server from your home PC then that home PC needs an Office license (even if it's not running Windows). That means that the sort of places buying Enterprise agreements, with large VPNs, need a license for all of the PCs at home. So these basically come bundled once you're buying enough. I assume that the £10 cost is just for the media (rounded up a little!). We never got as far as offering this to our users though.
- Tyrannosaurs 16y ago
  A lot of companies avoided these as originally MS made the company liable for ensuring that the software was uninstalled from the home machine when the individual left the company. As a result the companies said screw that and just never made it available to staff (rightly working out that there was no way that could make that guarantee). I believe that this restriction has been lifted now though so some may revisit it.
  - arethuza 16y ago
    We were told that it was the individuals responsibility - with there being a clear hint that they didn't care.

evgeny0 16y ago

+1 Perhaps it's their way of dealing with the fact that Office is just too expensive for many people, without acknowledging that to the public by dropping the price. People who don't use Office for business would struggle to justify $209 AUD (RRP for Home and Student edition) to themselves just to write the occasional letter - even if they're not aware of Google Docs or other alternatives.

jl6 16y ago

There is one important network effect they seem to be neglecting - the "big ball of mud" network effect of having hundreds of Excel spreadsheets all linked into each other, forming critical parts of the finance infrastructure of megacorps. This kind of end-user-computing nightmare is so hard to migrate away from that most companies can't even conceive how to do it. However, regulatory schemes like SOX in the USA and Solvency II and Basel III in Europe, are forcing the issue. Big banks and insurers won't be allowed to carry on running critical finance operations on such a fragile stack, so there are currently huge migrations away from Excel happening all across the financial services industry. Software like SAS and Business Objects seem to be the anti-Excels of choice. There will obviously still be Excel on the desktop, used for ad-hoc data manipulation and visualization, which is what it is actually good for, but this type of usage is much easier to replace with something like OpenOffice.

Tyrannosaurs 16y ago
My experience is that corporates have no great desire to migrate away from Office though. Finance users will insist (with some justification) that OO Calc isn't as good as Excel, the training department will point out reskilling costs for all the admin staff, the senior managers won't be keen to move away from PowerPoint which they all know and all of a sudden a few hundred quid a head will seem not worth saving.