Microsoft to offer free Starter Edition of Office 2010

Are open-source office suites such as OpenOffice.org starting to put the bite on Microsoft when it comes to cost-conscious buyers?

That's one interpretation that can be put on Microsoft's decision to allow PC manufacturers to ship Microsoft Office Starter 2010 on new PCs. Office Starter 2010 comprises Word Starter 2010 and Excel Starter 2010, stripped down versions of the major components of the suite.

Exactly how stripped down has yet to be seen, but according to Microsoft officials the Starter Edition will have "the basic functionality for creating, viewing and editing documents." It will also have a new task frame, providing easy access to a getting started guide, clip art, templates and other content.

Starter Edition is being positioned as a replacement for Microsoft Works, and was developed after an examination of tasks commonly performed by Works users.

"A major problem for Microsoft is figuring out how to offer free software using the advertising supported model without jeopardizing its legacy paid software business. Microsoft knows there’s a lot of money in ads but the company already makes US$16.4 billion a year selling software.

"However, steady improvement in free online software such as Google Docs and Spreadsheets, coupled with the availability of free open source productivity suites, such as OpenOffice.org, may leave Microsoft no choice but to come up with its own free software model. Such a model would eventually have to include Office rather than just Works in order to compete with other free software products already on offer", Beer wrote.

An interesting twist to the model is that Office Starter 2010 will be upgradable to one of the three full versions of the suite (Office Home & Student 2010, Office Home & Business 2010, or Office Professional 2010).

The trick is that the full Office product will be pre-loaded on the PCs. All users will need to do to activate full functionality is purchase a product key card - which will be packaged like a gift card and sold through major electronic retailers - and type the key into the software.

For potential Office 2010 users that aren't buying a new PC, Microsoft will use its virtualisation technology to allow the use of a downloadable trial version alongside earlier versions of Office. This 'Click-to-Run' technology will also automatically download and install any software patches for Office.

A public beta of Office 2010 is expected before the end of the year.