Office 2010: Microsoft to charge PC makers less for preloading more

Microsoft is planning to charge PC makers $2 per copy for Office Starter 2010 if they also agree to preload the Bing Bar and Windows Live Essentials, according to information shared with me by a Microsoft reseller. If a PC maker wants Office Starter 2010 only, Microsoft plans on charging $5 per copy.

As I've blogged previously, with Office 2010, Microsoft is going to be employing a number of different  distribution strategies in the hopes of attracting more customers. One of those strategies involves offering a stripped-down version of Word and Excel -- a bundle known as Office Starter -- preloaded on new PCs. Microsoft is counting on a number of Office Starter customers deciding to "trade up" and activate a more expensive, more complete Office 2010 version once they try Starter.

Here's what the company is telling PC makers about Office 2010, as explained in a single slide shared with me by the aforementioned reseller:

(Click on the diagram to enlarge.)

A note on some of the acronyms: OPK is OEM Preinstallation Kit -- the tools Microsoft provides OEMs to help them preload multiple copies of a product more quickly and easily on new PCs. H&S is the Home and Student edition; H&B is Home and Business; Pro is Office Professional. OPC is OEM Partner Center.

Microsoft is calling the $2 per copy OEM version "PC Essentials." As described in the fine print, in order to get that lower preload price, OEMs must preload not just Office Starter, but also Windows Live Essentials (Mail, Messenger, Photo Gallery, etc.), the Bing Bar and set the PC browser defaults to Bing and the MSN Home Page.

I asked Microsoft for comment on this pricing plan and was told, via a spokesperson: "We do not discuss the specifics of our arrangements with our OEM partners."

Office Starter 2010 enables basic document viewing and editing only for Word 2010 and Excel 2010. Starter will be ad-supported, so, free to consumers. It is meant to replace the Microsoft Works trial that is often preloaded on new PCs. In spite of its name, Office Starter 2010 has little resemblance to Windows 7 Starter Edition or Windows Phone Starter Edition.

Microsoft also will be offering customers Office 2010 via a Product Key Card, which is a single-license card that unlocks Office 2010 which will be sold at major retailers and OEMs. The idea behind this is to allow users to more easily and quickly upgrade to one of the full consumer versions of Microsoft Office 2010. There’s no media on the card; it’s just a key. This works when an Office image is pre-installed already on a new machine and the key activates it.