Ready, Fire, Aim! - Mihail's Public Blog: Microsoft thinking about limiting Office 11 to newer OS?

News.com speculates, based on the fact that the beta of Office 11 does not currently work on older operating systems, that Microsoft may be thinking about limiting the product's ability to run on them so as to encourage conversion of customers to its newest operating system. Such a move would also limit the testing and hassles Microsoft has to go thru to ensure that the product works on every computer already out there.

Limiting the final version of Office 11 to Windows 2000 and XP would potentially encourage users of older operating systems to upgrade, but it could further erode relations between Microsoft and business customers already stung by increases in volume licensing fees, analysts say. Some business customers have indicated that they may explore alternatives to Office, such as Sun Microsystems’ StarOffice and OpenOffice, due to Microsoft’s licensing plan.

Many companies have complained of feeling forced to sign up for the new program, known as Licensing 6. Market researcher Gartner estimated the program raised the majority of Microsoft business customer rates from 33 percent to 107 percent.

"It's definitely a perception issue," Gartner analyst Michael Silver said of Microsoft appearing to push its customers around. "In a lot of things Microsoft does, there are perception issues like that."

Beyond sour customer relations, gauging the impact of such limitations on Office 11 is more difficult to project than it might seem, analysts say. At the end of 2001, Windows 2000, Windows XP Home and Windows XP Professional accounted for only 20 percent of the operating system's installed base, according to IDC. That number could double by the end of 2002.

That means that when Microsoft releases Office 11 in mid-2003, half or more of people running Windows would have to upgrade to a newer version before installing the new product. For Microsoft, which financially stands to gain from customers upgrading to newer versions of Windows, limiting Office 11 to the newer operating systems could be important for getting laggards to upgrade.