NPD reports today that Microsoft Office 2010 sales are much lower than its initial release of Office 2007 and only slightly improved over its Office sales earlier this year.
NPD gives a few reasons for the lackluster consumer launch, which began just two weeks ago.
- Office 2007 was launched alongside Vista
- The Office Suite market is saturated
- Office 2010 was launched during a seasonally slow period for PC purchases [I’d add Intel just announced record earnings and IDC just announced strong PC growth]
- Office 2007 was a radical new design, 2010 not so much
I’d add that low-priced netbooks, which were just becoming popular in 2007, are now much more prevalent in the market today. Most netbooks do not come with Microsoft (MSFT) Office pre-installed to keep prices below the $300 mark. Open source alternative Open Office is often found on these machines.
NPD states that the free online alternatives to Office, like Google’s (GOOG) Docs, are playing little to no role in the slowed adoption of Microsoft Office 2010.
I wouldn’t discount the Google Docs offering entirely, however. Students, who traditionally make up a large part of Microsoft’s Office installed base, are turning to online offerings much more, especially as their schools “go Google” in huge numbers.
Michael Cohn from Google Apps integrator Cloud Sherpas says,
Google also counts 2 million mostly small businesses who have gone Google. Those workers are more likely to hesitate before updating to Office 2010 when they know most of that functionality exists for free, in the Cloud.
I also wouldn’t discount the breadth of online Office users overall. For instance, Microsoft’s own Facebook Docs is available to its half a billion users.