Can Microsoft count on inertia to spur Office 2010 upgrades

Habits, once ingrained, are hard to break. Just ask any smoker -- or the 250 million people that have bought Microsoft Office.

For sure, there are power users who covet Office's handling of macros and complex forms. And there are plenty of corporate employees who swear by Office as a central front-end for SAP, SharePoint and other line-of-business applications.

They'll likely be among the first to sign up for Office 2010's beta, which will become available in the third quarter, Microsoft said today. The final release of Office 2010 is scheduled for the first half of next year.

For most users, the last 'must-have' feature debuted by Office was probably many years ago. But companies stay on the Office upgrade treadmill -- despite the $155 annual per-head tax to do so -- mostly out of the "tremendous inertia" the software has built up over the last 20 years, according to Paul DeGroot, an analyst with the independent firm, Directions on Microsoft.

Every new version of "the Office suite gets more and more components," he said, "and even though most people won't use most of them, you only need someone to depend on one of them to make it sticky."

Chris Capossela, senior vice president of the Information Worker group at Microsoft that produces Office, doesn't take exception to that characterization. "The fact that employees don't use every nook and cranny of Office doesn't reflect much," he said in an interview last month. "I challenge you to tell me how many of the features of your Tivo do you really exercise? Could it do a lot more stuff than you use it for?"

Eyeing the MacBook Pro laptop a reporter was typing on, Capossela asked: What about iLife? How many Mac owners actually use GarageBand, iLife's DJ app, and how many just enjoy the glory of association?

Meanwhile, "Office may not be cool," Capossela said, "but man, everyone uses it."

But habits can die. Lifelong two-packs-a-day smokers do quit. And even longtime Office users are starting to make the switch to free or low-cost office suites, which are as plentiful today as a foreclosed home in Florida.

With everyone focused on netbooks' erosion of Windows revenue, few noticed that profits at the Microsoft Business Division in the most recent quarter were down 6% sequentially. Defections to OpenOffice.org, Google Docs, Zoho Docs and others have happened mostly among consumers and small businesses. With fewer users, it is easier for them to break free of Office's orbit and its $240 to $540 upgrades.

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