Microsoft releasing free version of Office

Microsoft has announced plans to make a version of Microsoft Office available online for free next year.
The move is widely believed to be a comeback against Google, whose Google Apps heavily overlap with Microsoft’s traditional arena – namely, document creation and editing software – and who last week removed the ‘Beta’ trial label from Apps and made it easier for users to sync info from with Microsoft software.

Although the free version of Office would be ‘lightweight’ compared to the paid-for PC version, head of Microsoft’s business division Stephen Elop said it would still provide much more extensive tools than online rivals. 

Currently, Microsoft Office for Small Business 2007 is £391.48 from the Microsoft site, while Office 2008 for Mac leaps up to £430.63. Not exactly a startup-friendly price range, so this move will be warmly welcomed by small business owners looking to keep costs tight wherever possible – which really should be all of them.

From Microsoft’s standpoint, this is a deft move. The FT today speculates that making Office free is ‘likely to take only a small bite out of Office revenues in the short term’  and ‘will do little to hurt Microsoft’s overall business’ – even though 42% of its sales last year came from Office software.

But it re-positions Microsoft as a viable, free, extremely useful option online – infringing on the brand values Google like to tout. Plus, Microsoft has vastly more users of its software than Google – 500 million versus 15 million, but dropping down to only hundreds of thousands of paying customers for the Google premium software against around 250 million for Microsoft’s (about half of users pirate the software).

As ever, it will be fascinating to see how the Google / Microsoft rivalry pans out. But most crucially for small business owners, the fact that Google are competitively pushing Microsoft to offer its invaluable software for free can only signal great things for the future of cost-cutting IT.

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