Microsoft dumps upgrade pricing for Office 2010

Retail pricing will increase costs for many users who already own older Office suites

Microsoft today disclosed retail prices for Office 2010, and said it has no plans to offer "upgrade" editions -- the discounted versions for users who already have an earlier edition on their PCs. The move will effectively raise the price for many users who want to migrate from older editions of the popular suite.

Microsoft also spelled out prices for its new "key cards," single-license codes that will be sold at up to 30% off boxed copy prices, for upgrading the Office Starter 2010 mini-suite that many computer makers are expected to preinstall on new PCs.

Microsoft's trimmed the number of retail editions of Office 2010 for the general public to three, down from Office 2007's five.

The boxed version of Office 2010 Home and Student, which includes Word, Excel, PowerPoint and OneNote, comes with a price tag of $149, and lets a family install the suite on as many of three household PCs. A single-license key card will cost $119, 20% less than the boxed copy.

Office 2010 Home and Business, which adds the Outlook e-mail client to the four applications available in Home and Student, runs $249 and can be installed on up to two of the buyer's PCs. A one-license key card will be priced at $199, a 20% savings.

Adding Publisher and Access, the latter Microsoft's desktop database software, Office 2010 Professional will be priced at $499 and can be installed on a pair of PCs. The single-license key card, however, will run $349, a discount of 30%.

The SKU Microsoft added to the retail line today is Professional Academic, an edition available to K-12 and college students, staff and faculty. The edition contains the same application mix as Office 2010 Professional, can be installed on up to two PCs and will cost $99. No key card option will be available for the academic edition.

Microsoft is making changes to more than the suite's editions, however. A company spokeswoman confirmed today that Microsoft does not plan to offer separate upgrade editions for Office 2010. That's a major departure from the past; Microsoft has traditionally sold upgrades at prices significantly less than the so-called "full" editions, which are designed for installing the suite on a PC sans Office.

In the Office 2007 line, the Standard edition -- which contains the same applications as Office 2010 Home and Business -- costs $399.95 for the full version but only $239.95 for the upgrade, a savings of 40%. Office 2010 Home and Business, meanwhile, will cost $249 in the boxed version, effectively raising the price of the suite by $10 for people wanting to upgrade. The key card price of $199 for Office 2010 Home and Business is $40 less than the upgrade price of Office 2007 Standard, but it's a one-license deal; the boxed copy lets customers install the suite on two PCs.

Office 2010 Professional will cost even more than the corresponding Office 2007 edition with the elimination of upgrade pricing. Microsoft sells the Office 2007 Professional upgrade for $329.95, but the boxed copy of the same edition of Office 2010 costs $499, a 51% increase. And Office 2010 Professional's single-license key card price of $349 is $20 higher than Office 2007 Professional's upgrade.

New with Office 2010, Microsoft's product key card -- a small credit card-sized piece of plastic that includes a single license activation key -- is aimed at customers who have purchased a new PC with Office Starter 2010 preinstalled. Starter, which replaces the decades-old Microsoft Works suite, includes reduced functionality versions of Word and Excel, but lacks the PowerPoint and OneNote applications available on Home and Student.

All the code for Home and Student, Home and Business, and Professional are installed on new PCs that offer Officer Starter; the key simply "unlocks" the appropriate version, eliminating the need to download additional software.

Office Starter will include on-screen advertisements in the lower-right-hand corner of the Word and Excel windows; those ads, of course, vanish when a key card and its product activation key are used to upgrade to one of the paying editions.

Microsoft will also offer two other SKUs to its volume license corporate customers: Office 2010 Standard, which includes Word, Excel, PowerPoint, Outlook, OneNote and Publisher; and Office Professional Plus, which adds Access, InfoPath, Communicator and SharePoint Workspace to the Standard mix. Those two editions will not be sold at retail.

All versions of Office 2010 also come with Office Web Apps, the bare-bones online Word, Excel, PowerPoint and OneNote applications that consumers can use for free via Windows Live and enterprise workers can access if their companies have an Office Software Assurance Plan.

Office 2010 is scheduled to debut in June. The Microsoft spokeswoman said that the company would offer a promotion at some point before its release that will give buyers of Office 2007 a free or heavily-discounted copy of the new Office 2010 when it launches.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter @gkeizer, send e-mail at gkeizer@ix.netcom.com or subscribe to Gregg's RSS feed .

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