The present versions of Microsoft Office sell for $150 to $600, depending on which programs are included. Word and Excel are always included in all versions, but Outlook, Access, Publisher, and other Microsoft Office programs are generally not included in the cheaper versions.
These overpriced products have recently encountered strong competition from free open-source programs such as OpenOffice.org, as well as from online cloud computing equivalents such as Google Docs and Zoho Docs. Several large organizations have recently switched from Microsoft Office to other programs, including Genentech, Salesforce.com, Hamilton Beach, Fairchild Semiconductor, and the District of Columbia Government. Microsoft apparently is feeling "the heat" and now will offer a free version of its word processor and spreadsheet programs in order to fight the low-cost and no-cost competitors.
The Office 2010 Starter Edition will be ad-supported and will be available for free. The catch is that the Starter Edition will only be offered on a new computer sale and not as a free download. The Starter Edition will only include Word and Excel and will be stripped-down versions of the full product. The Microsoft web site states the following:
As part of Office 2010 software that will be pre-loaded by the PC manufacturers on their PCs, we’re introducing Microsoft Office Starter 2010. Office Starter 2010 is a reduced-functionality, advertising-supported version of Office 2010, available exclusively on new PCs. Office Starter 2010 will provide new PC owners with immediate exposure to the Office 2010 experience on new PCs right out of the box.I see this as good news since any new word processor and spreadsheet that is available free of charge will help the consumer. Coming from Microsoft and included with new computers, Office Starter 2010 is bound to be popular. However, the success of the program will depend upon how much functionality is "reduced."
Office Starter 2010 will include Office Word Starter 2010 and Office Excel Starter 2010, with the basic functionality for creating, viewing and editing documents. Office Starter 2010 will replace Microsoft Works, offering a consistent Office user experience, such as the Ribbon, with a simple path to upgrade to a fully-featured version of Office 2010 directly from within the product.
For people who want to try or buy Office 2010 on existing PCs, Microsoft is unveiling Click-to-Run, a new and enhanced download experience for consumers. Click-to-Run makes it easier than ever for customers to try or buy Office digitally by significantly reducing the time and effort required to download Office 2010 over the Internet. Click-to-Run automatically downloads and installs any software patches when connected to the Internet, helping people maintain and keep their Office software up-to-date. Click-to-Run uses virtualization technology so it allows customers to maintain multiple versions of Office. This enables them to try Office 2010 side-by-side with the existing version of Office.
We will have the broad beta of Office 2010 later this year and invite people to become familiar with Office 2010, in the way that works best for them, and then easily upgrade to a full version of Office Home and Student 2010, Office Home and Business 2010, or Office Professional 2010 when they’re ready to buy.
I am guessing that the reason the free version of Microsoft Office will only be sold with new computers is that Microsoft needs help enticing new computer buyers to select Microsoft products. After the dismal sales of Vista, Microsoft apparently wants to make sure the sales problems are not repeated with Windows 7. Adding in a free word processor with Windows 7 while simultaneously not offering the same product to users of earlier versions of Windows should help the sales of Windows 7.
You can read more at http://blogs.technet.com/office2010/archive/2009/10/07/new-ways-to-try-and-buy-microsoft-office-2010.aspx, a blog written by Microsoft.