When Office and Windows are given away

Low prices for education market hint at Microsoft's fears

All circumstantial evidence, not enough to convict anyone, but it will do to be going on with. Here is a plausible scenario:

We are witnessing a live race - Open Office versus Free MS Office. The latest generation of phenomenally successful education-targeted sub-notebooks and diskless workstations are all running Open Office on Linux (excepting now of course the OLPC).

Within a very short time a great many young users will have been exposed to Open Office. QCA approved companies like INGOTs in the UK will supply training (if needed) and the dominance of MS Office is threatened in a critical sector; future users.

So who will win this race? Open Office and MS Office are now both free for 'bona fide' students. Which would you choose?

Well, three and more years ago this question would have been a no-brainer, you would have chosen MS Office. What about now? Is this still true?

Open Office looks set to follow in the footsteps of Firefox and achieve significant market penetration.

If, in this case, say 20 per cent are OO users, 5 per cent MS Mac Office 2004, 70 per cent MS Office 2003 and a handful were MS Office 2007/2008, then how does your student's decision look?

Both OO and MS Office 2007/8 (in our imaginary scenario are free of purchase cost to the student), the 'something expensive for nothing principle' is very strong, so free MS Office (which costs industry and the public sector hundreds of pounds per go) still is pretty compelling, especially with that free laptop!

And, after all, the young don't think too hard about the future of vendor lock in and they also always save in the application's default format (.docx). To cap it all Becta has just signed up for another three years of the now infamous MS MOU.

It looks like a win to 'free' MS Office.

Two things may be pivotal, the need for MS to protect loss of revenue and a potential backlash from a cash strapped Public Sector and bottom-line conscious business sector.

MS Office related revenue is a serious bedrock of funds for Microsoft. It can't just be given away to everyone. In the standard proprietary software business model free, or nearly free software has to be subsidised by those paying full rate. Microsoft subsidises education hardware vendors in the UK very generously already, even so their profit on turnover ratios are wafer thin.

Any loss of perceived value for bundled MS products could well further erode profits, some firms will fail. Why, for example, would a school buy a desktop computer with Vista and Office 2007 from say RM plc when a 'student' could get the whole lot pretty much for nothing and bring it in on a laptop?

Meanwhile as stated before the Public Sector and Industry are paying full price.

To the mix above add a failure of OOXML to become a Standard Format and the inability of MS Office to use already standard Open Document Formats. In which case, as in much of mainland Europe, we may see a sudden and massive, corporate and public sector switch to Open Office as firms address their bottom line and worry about backward compatibility of their legacy files.

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