Office 2007 Pricing, Packaging Detailed

Microsoft overnight announced packaging and pricing details for its next-generation Office System of client and server products, now officially named "Office 2007." The company is largely keeping prices the same as Office 2003, making minor changes to the suites it will offer.

Scheduled to be available by the end of this year, Office 2007 includes a new user interface that replaces the standard toolbars with "ribbons" offering features specific to the current task. Outlook 2007 has a few new features of its own, including a "To Do" bar for viewing mail, tasks and appointments in a single pane, and a built-in RSS reader.

Server oriented products will also take center stage in Office 2007. Microsoft's acquisition of Groove Networks last year means Groove Server 2007 will join Forms Server, Project and Project Portfolio Server, as well as SharePoint Server. New features include hosted Excel and InfoPath capabilities.

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Aside from the new server functionality and task-oriented user interface, the big change coming to Office 2007 is the new Open XML file format. Now a published standard through Ecma International, Microsoft Office Open XML packages editable XML files within a ZIP archive and will be licensed royalty-free.

Three subscription services are also new to Office System in the 2007 release. Office Groove Enterprise Services will be available through volume licensing and offer Web based services for managing Groove 2007 deployments. A $79 per year Live Groove subscription takes the desktop product functionality onto the Web for small businesses.

Finally, Microsoft Office Live, which entered private beta testing on Wednesday, will deliver complementary services for small business customers, such as hosted e-mail and Web sites. Both paid and free ad-supported services will be available as part of Office Live.

On the desktop side, little has changed when it comes to packaging. Office Professional Plus 2007, only for volume licensing customers, will replace Professional Enterprise Edition 2003. A new addition to the Office 2007 suite lineup is Office Enterprise 2007, which adds Groove 2007 and OneNote 2007.

For individuals, Office Professional 2007 features the typical array of Office applications: Excel, Outlook, PowerPoint, Word, Access, and Publisher for $499 USD, or $329 USD when purchased as an upgrade. Office Small Business 2007 offers a similar lineup without Microsoft Access for $449 and $279 USD.

Office Standard 2007 will include the four basic applications as before: Word, Excel, PowerPoint and Outlook for $399 and $239 USD. However, Microsoft has changed the SKU targeted at students and teachers, naming it Home and Student 2007 and replacing Outlook with OneNote. That version will now be available to all users for $149 USD.

Available only for purchase on new PCs and through OEMs, an even slimmer Office Basic 2007 edition will include Excel, Outlook and Word. Pricing was not given for the Basic SKU.

With 34 options for customers interested in Office 2007, new server software, and new Client Access Licenses, Jupiter Research senior analyst Joe Wilcox warns that such complexity will make decisions harder for businesses. This issue may be why Microsoft has announced packaging details much earlier than it did for Office 2003.

"My concern is that Microsoft has introduced too much complexity, making more difficult the arduous purchase decision process. Microsoft is right to get information out earlier, because evaluating an Office purchase will be much harder for businesses this release cycle compared to Office 2003 or XP," said Wilcox.

Wilcox also notes that a large chunk of volume licensing customers will see their contracts expire at the end of July. "Releasing Office 2007 desktop and server product information and pricing now will be essential to encouraging customers on the fence about upgrade protection to continue with Enterprise Agreement or Software Assurance."

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