Office 2010 Will Speed Demise of Boxed Software

Microsoft released its pricing for Office 2010 today, and the most intriguing part is how much less money you'll pay for the non-boxed versions --- up to 30 percent less. This pricing scheme will ultimately help turn boxed software into an endangered species.

With Office 2010, Microsoft introduces what it calls Product Key Card pricing, which essentially means unlocking an electronic version of Office, rather than buying Ofice as boxed software. The Product Key Card version of Office Professional is $349, compared to $499 for the boxed version. Office Professional includes Word 2010, Excel 2010, PowerPoint 2010, OneNote 2010, Outlook 2010, Publisher 2010, Access 2010, premium technical support, and Office Web Apps.

The Product Key Card version of Office Home and Business is $199, compared to $279 for the boxed version. Office Home and Business includes Word 2010, Excel 2010, PowerPoint 2010, OneNote 2010, Outlook 2010, and Office Web Apps.

The savings aren't as substantial for Office Home and Student, which includes Word 2010, Excel 2010, PowerPoint 2010, OneNote 2010, and Office Web Apps. the Product Key Card version runs $119, versus $149 for the boxed version.

What exactly is a Product Key Card? It's a registration code on a plastic card that you purchase and enter into a pre-loaded "Starter" version of Office installed on your PC. (Starter version is a replacement for Microsoft Works, which includes stripped-down, ad-supported versions of Word and Excel.) If you don't have a pre-loaded Starter version of Office, you can download a trial version, and apply the code to the download. Either way, you don't buy boxed software; you buy a plastic card with a code on it.

I would expect that at some point, Microsoft will do away with having to buy a physical plastic card, and you'll be able to buy a registration code online.

In essence, Microsoft is juicing up the shareware, trial, and try-before-you-buy model which has been around for decades --- my first book, for example, was The PC/Computing Guide to Shareware, published back in 1992.

There's a difference between a one-person or five-person company making the model a primary means of distribution, and the world's biggest software company doing it. The fact that Microsoft is giving big discounts to non-boxed version of Office means it's going to push electronic distribution. Given its market power and the price differential between boxed and non-boxed versions of Office, you can expect electronic distribution to eventually win.

So say good-bye to whatever boxed software you have laying around --- it may become an endangered species.

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