Its Microsoft and its Free?

The following conversation and characters are fictitious. Any similarity to a real person is totally unintended.

Me: Microsoft is giving something away free…

My Friend: No Way! The only thing less likely than Microsoft giving something away free would be Apple giving something away free. And that never ever happens.

Me: Well, I thought I would never live to see the day either, but it is going to happen. Microsoft is making its new version of Office (Word, Power Point, Excel, Access) available on the Internet free. Don’t you like free?

My Friend: I love Frrreeeeeee. I just find it hard to believe. Office accounts for a huge portion of Microsoft’s profits…so why would it just give Office away?

Me: Because it has no choice. You see, companies like Google and Adobe have been giving word processing and spreadsheet creating software away for years now, and people are beginning to get use to their programs. I use Google Doc almost exclusively. Because of these free web products and Microsoft’s high software prices ($500 for Office) people are not up grading their older versions of Office.

My Friend: I still don’t get it. How is giving away a product going to help Microsoft regain lost profit?

Me: OK, here’s the strategy…First you give users a free version of Office that doesn’t include all the bells and whistles. Then once you’ve hooked them and they remember how much they love Office, they’ll upgrade to the paid version… that includes all the bells and whistles.

My Friend: Interesting idea…when will the “hook”, I mean the free version of Office be available?

Me: In June

My Friend: wow…now if only Apple decided to give something away free

Me: Stop dreaming my friend, stop dreaming.