In January, IBM announced the first pre-load agreement for Lotus Symphony with our partner Archos. The Archos 10 netbook includes Symphony as part of the out-of-the-box functionality.
Last week, Archos announced a new 10s netbook. Interestingly, the 10s includes Office 2007 -- unusual for any laptop or netbook. Normally, adding Microsoft Office to a new PC is an additionally-purchased item -- at Dell and Lenovo right now, this charge can be anywhere from US$90 to US$150 for basic editions. Yet the Archos 10s netbook comes with Microsoft Office for free:
ARCHOS is granting you a 12 month free licence. Beyond this period, you can choose whether you want to buy it or not. It's your call.OK, wait a second. A 12-month timebombed version of Microsoft Office? This is a brand-new approach from Microsoft...not available from the big names. Of all the places for it to crop up, it shows up with the organization that happens to be IBM's first OEM agreement distributor for Symphony.
Microsoft is scared of Lotus Symphony -- scared enough to give away Office. Sure, they probably figure the "hook" is that the netbook user will use Office for a year and then be likely to license it...try and buy is not a bad distribution tactic. But it's one that they are not using anywhere else. For good reason, too. Microsoft's financials indicate that over 80% of the revenue for the Windows operating system comes from OEM distribution. The percentage is likely lower for Microsoft's Business Division, which has those lock-in Enterprise Agreements in place. Still, OEM is a pretty important part of the $19 billion division's revenue.
If a 12-month try-and-buy were to become the norm for Microsoft Office distribution, a whole lot of $90-150 purchases would be deferred, perhaps never to happen. All the more reason why consumers should be wondering right about now why this one particular Netbook is going to come with Microsoft Office for free, while PCs charge extra? This must be what Microsoft meant in this March quote from Stephen Elop:
"There are new ways to package and monetize SKUs that are unique to the netbook market. From the Office perspective if someone is spending just a few hundred dollars on a netbook, how much will they spend on productivity software?"The Motley Fool got it right two weeks ago when they said that "Microsoft Fears the Netbook". That fear is translating into a desperate move to give away Microsoft Office.
The response from other PC and netbook manufacturers is obvious, right? Give me a call -- we'll happily put together an agreement to help you distribute Lotus Symphony at no charge, too.