Microsoft Opens Office for Small Businesses

When Microsoft releases in June the next update of its Microsoft Office suite, a version tailored for small and medium-size businesses (SMBs) will be included in the product line, according to Microsoft.

Few details were forthcoming about the version from Microsoft, which confirmed that an SMB edition of Office 2003 is in the works, but declined to comment on the software's anticipated functionality or pricing.

The company also declined to specify whether the SMB edition will be a new retail offering or a continuation of a little-known suite it already offers, a Small Business edition of Office available only from computer manufacturers as a preinstalled product.

Office Options

Microsoft's current Office suite, Office XP, has three retail versions. The Standard edition, priced at $479 for new users, includes Microsoft Word, Excel, Outlook, and PowerPoint. Office XP Professional, which also includes Microsoft's Access database software, retails for $579. The Developer version adds to the suite several development products such as FrontPage; it costs $799.

Pricing for Office 2003, now in beta testing, has not yet been announced.

The current SMB version of Office XP includes Word, Excel, and Outlook, but drops PowerPoint in favor of Microsoft's Publisher software. Vendors selling the software include Dell Computer and Gateway.

Price Points

Prices vary, but buying Office XP Small Business Edition preinstalled from a manufacturer is often the least expensive way for businesses to legally purchase Office, said Directions on Microsoft analyst Paul DeGroot, in Kirkland, Washington.

And that's what smaller businesses need most from Microsoft, he said--not tailored Office features, but a lower price tag.

"A lot of people are still using Office 97 because they aren't willing to fork over $400 for the latest version of Office," DeGroot said.

Word and Excel are the most-used Office applications, and what cost-conscious businesses crave is a cheaper way to give employees those core applications, DeGroot said.

If Microsoft made Office XP Small Business Edition available through the retail channel at the prices manufacturers generally charge, which DeGroot estimated at between $150 and $200, it would likely find significant demand for the bundle--but at the cost of cannibalizing sales for its more-expensive Office packages, he said.

A Microsoft spokesperson declined to comment on whether the planned SMB edition of Office 2003 will be available through retailers. More details will be available closer to the product's launch, she said.