Office 2007 sales spur software market

Spurred by sales of Microsoft's Office 2007, the software market hit its highest level since 1999, according to a report released Wednesday by the NPD Group.

Overall, the U.S. non-game PC software market at retail stores totaled $3.3 billion in 2007, a 15 percent increase over the $2.9 billion generated in 2006. The rise is even more notable, as sales had been essentially flat from 2000 through 2006.

But, a whole lot of that is due to Microsoft, largely because of Office, but also because of Vista's debut. According to NPD's Chris Swenson, 80 percent of the total growth in the market can be attributed to the release of those two products. Also of note, security software sales increased 55 percent compared with the prior year, Swenson said.

Although boxed copy sales of Vista have been down over XP's first year, they were nonetheless up 40 percent from last year's Windows sales.

Sales of Office 2007 are doing even better, up 100 percent compared with sales of Office 2003 in its initial months. That led Office to account for 17 percent (by dollar volume) of all software sold at retail stores last year.

"It's a huge hit," Swenson said.

Swenson also noted that NPD is not seeing significant sales of boxed copies of Windows XP, suggesting to him that the downgrade phenomenon is overblown. "I don't think people can do it in droves, even if they want to," Swenson said, noting that fewer retailers are even carrying the older Windows XP these days.

[Commander_Spock]

Whoaaah!

"Sales of Office 2007 are doing even better, up 100 percent compared with sales of Office 2003 in its initial months. That led Office to account for 17 percent (by dollar volume) of all software sold at retail stores last year..." That's a 100 percent increase in the "ERR" ACHILLES HEELS syndrome that is also inherent in the non-ISO Standardized "Office 2003". :-( !

[Commander_Spock]

Now...

... that's how many/overwhelming situations that will have to be addressed by the PHDs Econs. (Doctors/Doctorate in Economics) and analysts around the world. Wow!

[sanenazok]

I can do it too

"Sales of Office 2007 are doing even better, up 100 percent compared with sales of Office 2003 in its initial months"<br />and Icarus flew too close to the Sun, the stolen child of a mindless step-father abandoned at birth to counter-exist in the shadow of the world. If ISO cert. mattered to anyone they would not be using MS Office. There are so many options with ISO certs, Lotus Symphony being but one. Per you, people want ISO cert products so badly they keep buying MS Office to compensate for the fact that MS Office isn't ISO certified.

[Maclover1]

XP is probably

the most pirated OS ever. Its long run and the fact that MS did not care because it helped their desktop market share continue to soar.<br /><br />No one downgrading from Vista to XP is buying a copy of XP. I thought some of the major companies were even offering free copies of XP to those he bought a new Vista PC and wanted to go back.

[sanenazok]

stats anywhere?

You should preface each sentence with IMHO. Actually MS cracked down on piracy in earnest with Office 2000 SP1.<br /><br />MS encourages piracy? Then what about all the ENDLESS flame wars that were taking place when MS announced product activation for XP? Can't have it both ways.

[jordanc123]

Dell charges premium for XP

I purchased a Dell 1530 for my kids this past Christmas, and Dell was charging a $15 premium to downgrade to XP. Probably because OEMs have to provide OS support on the machines they sell, and there is little $ incentive to support the older OS.<br /><br />That said, the machine rocks, Vista Home Premium has been great - absolutely no trouble whatsoever and even my wife, who is not a tech fan, has had no troubles with it.<br /><br />The Vista fud is overblown.

[-hh]

Stats indeed!

There's several problems with all of the claims that are being made.<br /><br />For example, for someone replacing their existing PC with a newer Vista PC, they have their old XP licence that can be recycled, hence there is **no need** to go buy another XP licence at Retail. <br /><br />As such, the only entity that has the relevant data is Microsoft, by counting electronic registrations. Since it is not in their best interest to report this data if it is bad news, the truth will never see the public light of day.<br /><br />Similarly, for sales of Office 2007, it is merely the most popular piece of software used by the entire business segment, and some of these sales will be automatic through existing software maintenance contracts (ditto Vista "sales"). Overall, this is merely a standard business expense that **happens to be** in the 'Software' accounting column. <br /><br />Even smaller businesses and individuals will pay too, if for no other reason than the classic: they have to keep up in case someone else sends them a file that's not backwards-compatible. <br /><br />As such, with such a huge legacy installed base to draw from, one really needs to run the numbers to infer actual sales: 17% of $3.3B is $561M, which at $500/copy...call it $561/copy for easier math...means that they've only sold 1M copies of Office. Considering that the current sales of PC's is 200-250 million units/year and that the guesstimated installed PC base is around 1-1.25 billion PCs, this very roughly means that 0.1% of all PCs have actually paid for a licence.<br /><br />If one changes these assumptions...say, takes the lower prices of licence upgrades into account...at $561/4 = $140 each, then the percentage of PCs adopting Office 2007 jumps to a whopping 0.4% of the worldwide total. <br /><br />The bottom line for all news reports always remains the same: run the numbers out the whole way, to gain perspective.<br /><br />-hh

[regulator1956]

Try Reading and Comprehension, Plus Math

The sales this article is referring to are at retail, not the manner many businesses get Office.<br /><br />Between the all the different versions of Office, the average price is more like $280, so that equates to 2mm copies.<br /><br />Yes, that's not that many, but there are many, many millions more via the business agreements and MSDN.

[jfalsken]

Don't buy if you run MSN

Office 2007 has several bugs in the software that destroys Your MSN software. It will turn off spell checker in MSN and a few other items. There is no patch and it blocks even aftermarket spell checkers form working in MSN. So donot buy office 2007 if you have MSN service. They are not even working on the problem. They just point the finger for you to contact your service provider, who can't help you fix the problem. Because it is in the office 2007 software that the problem lies. It turns off all the extras that you are paying for with your service provider. There is no patch to fix all the problems that it causes. Leaves you paying for services from your web service. Just flat turns them off with no way to turn them back on!