On Killing Your Brand

When it comes to Microsoft, I can be unforgiving.  Years of forced reliance on Windows as the de facto standard has not left a great deal of goodwill or patience.  That they can’t turn something as simple as their default web browser into a usable option doesn’t help.  When Microsoft fails, I no longer give them the benefit of the doubt.

This doesn’t mean I don’t praise them when it’s due.  Microsoft Office didn’t become the standard office suite by accident.  It was the best option, and has been for years.  Certainly Microsoft engaged in their typical format games to help; Word’s obscured, proprietary standard meant that every time a new version of Office came out, the alternative application you had been using couldn’t read the new Word files until someone managed to untangle their format.  So once Office became the standard, it was – as it usually is with Microsoft products – less than simple to find a reasonable alternative.

There was one problem with Office: it was expensive.  This was a throwback to the days when productivity software was a specialty field.  People literally in offices used Word Processor software like Microsoft Office. Everyone else could stick with WordPerfect or those electronic word processing machines that looked like typewriters.  Though the market for office software changed radically, pricing did not.  Or at least, the normal pricing model did not.  When I went to college, Microsoft Office started offering student and teacher pricing, but for years the only way to get it was through educational resellers that demanded to see a school ID.  This was a sloppy way to address a more serious problem: people at home wanted to use Microsoft Word and Excel, but not enough to spend $400 for the privilege.

In the past few years, some significant changes make Office’s continued corporate pricing strategy look far out of date.  First, the switch to more open document formats means that cheaper alternatives can read and write files that came from Office.  The OpenOffice project has produced some great products, like Symphony and Neo Office, that make owning the Microsoft variety a luxury.

Compounding the problem is that whole World Wide Web thing.  Google, in particular, is salivating over becoming the next tech monopoly and is just giving the whole office productivity suite away for free without even asking you to install anything.  Google Apps isn’t near the level of Office in terms of functionality, but for most people, Google Docs does everything they need from Word with the added benefit of real time document sharing and the ability to access things from any computer.

Yet Microsoft continues to charge for Office like productivity software is a specialty niche.  With totally free alternatives on the market, some of which are nearly as good as Office itself, what exactly is Microsoft’s strategy?  The barriers to leaving the Office platform are gone, meaning the only thing that would keep people using Microsoft Office is inertia.  I know Word so I’ll stick with Word.  But even inertia is subject to friction, and $200 is a lot of friction when there are free alternatives.  Yet rather than just change their pricing model and risk corporate buyers – who are likely Microsoft’s primary source of income – getting Office for cheaper, they’ve done things like selling the Student and Teacher edition of Office in stores everywhere.  So the Student and Teacher edition is essentially Cheaper Office for Everyone without anyone coming out and saying it.

I’d guess the ship is about to sail on Office’s hegemony one way or another, but if Office 2010 doesn’t do something significant with its pricing they risk losing more than a near monopoly.  They could end up being a has been, which would be too bad.  Office is one of Microsoft’s best products.

In fact, maybe it’s already too late.  Many of my friends have switched to OpenOffice already.  Even I haven’t purchased a new version of Word since 2003.  Its superior formatting features are all it has left, and I can’t justify spending over $100 for better control over my Headers and Footers.  Pretty soon, those big corporate buyers are going to lose their willingness to pay more for convenience, too.  At that point, what is Microsoft Office but another software package, scraping out some market share?

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