Microsoft enlists Dell to push Office 365 on new PCs

Computerworld - Some major computer makers are pushing Office 365 with their new PCs, but others have stuck with a more traditional bundling tactic of including a factory-installed, single-license trial.

"[Microsoft is] very clearly heading towards driving every consumer towards the Office 365 option that they can, in the hopes of a subscription," said Wes Miller, an analyst with Directions on Microsoft, in an interview Wednesday.

Of the top three computer vendors -- OEMs, for original equipment manufacturers -- only Dell offers Office 365 Home Premium, the consumer-grade subscription plan, with new machines. When a customer orders a customized PC, Dell offers a 30-day free trial to Office 365 Home Premium by default.

Microsoft offers the same 30-day trial on its website. The trial requires the customer to provide a credit card, which is charged if the plan isn't canceled within the trial period.

Dell customers can also add a one-year subscription to Office 365 to the PC's price, or one of the perpetual license versions of Office 2013.

Both Hewlett-Packard and Lenovo, the No. 1 and No. 2 PC OEMs last quarter by IDC's estimate, instead offer a factory-installed 30-day trial to Office 2013 (HP) or will add a paid copy of Office 2013 to the PC's hard drive (Lenovo).

The route taken by those OEMs was traditional, in that computer makers have long included Office on new PCs, either automatically as a trial or by customer request as a paid option, then collected a percentage of sales from Microsoft.

In fact, when Office 2010 launched three years ago, Microsoft supported the promotional tactic with a new way to acquire the suite. Called "product key codes" (PKC), they were 25-character activation keys sold at retail. At prices between $120 and $350, a PKC transformed a trial into a working version of Office 2010. PKCs were sold without DVD installation media and also acted as replacements for the dropped "upgrade" editions.

PKCs are also available for Office 2013 for between $120 and $360.

But Dell took a different tack, instead going with Office 365.

Not surprisingly, Microsoft has also taken that approach with its own tablet, the Surface Pro: Buyers who opt to purchase a one-year subscription to Office 365 Home Premium at the same time they order a Surface Pro receive a $20 discount.

"I anticipate this is their move forward," said Miller, of Microsoft's pushing Office 365 with a discount at hardware purchase time.

Microsoft has, of course, taken other steps to promote Office 365, especially Home Premium, which is aimed at consumers, a market Microsoft wants to shift toward a "rent-not-own" software model.

Dell bundles a 30-day trial of Office 365 Home Premium with new consumer PCs. (Image: Dell)