Microsoft Now Comingling Windows and Office on New PC Devices

Microsoft Now Comingling Windows and Office on New PC Devices

Windows and Office, sitting in a tree, c-o-m-i-n-g-l-i-n-g

Microsoft this week confirmed that it would bring Outlook 2013 to Windows RT devices in the Windows 8.1 update and that Windows 8 mini-tablets would receive a free copy of Office 2013. But the bigger story here is Microsoft’s increasing comingling of Windows and Office on new PCs. A decade after its history US antitrust trial, the firm is really starting to push a product tying strategy again.

Microsoft has long offered a version of Office Mobile on its devices-based Windows versions like Windows CE, Pocket PC, Windows Mobile, and Windows Phone. The theory was that these products weren’t dominant like the mainstream, desktop versions of Windows, so this kind of product tying was a consumer benefit not an antirust abuse.

Likewise, when Windows RT debuted last year, Microsoft included a version of Office for free. That Office version, called Office 2013 Home & Student 2013 RT, includes ARM-based versions of Word, Excel, PowerPoint, and OneNote, and is analogous to the mainstream Office 2013 Home & Student product that Microsoft sells for about $150 to PC users.

Here, again, the theory was that Windows RT targets devices, not traditional PCs, so the tying was legal and even beneficial to customers. It was also a fairly obvious enticement for consumers to take a chance on an otherwise risky new Windows platform that looks and works exactly like Windows 8 but offers no backwards compatibility with Windows desktop software.

The addition of Outlook 2013, which I first reported on earlier this year, only improves the value proposition of Windows RT. Microsoft had developed this application alongside the other Office 2013 applications last year, but declined to included it because of performance and reliability issues. But with Outlook being a major customer request, Microsoft fixed those issues and will include the application, for free, in Windows 8.1.

However, I was originally told the application would not be made available for free, so this change suggests that Microsoft is perhaps a bit more desperate to see Windows RT take off in the market. By comingling this valuable application with Windows RT, it may just achieve that goal.

Even more controversially, Microsoft is now changing the licensing for the mainstream Windows 8 product when sold on mini-tablet devices. Now, PC makers will be able to give away a copy of Office 2013 Home & Student with each new mini-tablet. This is the first time that mainstream Windows and Office versions—both dominant products in their respective markets—have been tied together like this.

(PC makers previously bundled a limited Office version with new PCs and today bundle a trial version of Office 365 Home Premium.)

Are there antitrust concerns to worry about here?

Microsoft’s argument, no doubt, will be that Windows and Office are dominant on traditional PCs, of course, but that these new devices—Windows RT devices as well as Windows 8 mini-tablets—are in fact part of a new market that is now dominated by Google Android and Apple iPad, and not Windows. In this case, it is Windows that is the underdog, and antitrust rules do not apply.

And you know what? They may just have a point.

TAGS: Windows 8
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