Here's the Word on less expensive software

Suzanne Choney • E-mail

For many, part of the back-to-school ritual includes buying a new computer and the accompanying software students need for writing reports, creating spreadsheets and making presentations.

Microsoft Office remains the giant in that field, dominating corporate and home computers. (Msnbc.com is a joint venture of Microsoft and NBC Universal.) But with a younger generation living more of its life on the Web, from Facebook to YouTube, free and Web-based productivity programs from companies like Google and Zoho have growing appeal.

More than 25 percent of online Americans use such Web-based programs, according to the Pew Internet & American Life Project, which surveyed 2,251 online Americans. Pew found that 39 percent of those in the 18- to 29-age range use Web-based software such as Google Docs, which includes a word processing, spreadsheet and presentation program.

Another free program, OpenOffice.org, can be downloaded from the Web or is available by CD, and resides on a computer’s hard drive. The open-source productivity suite has been available for several years.

Traditionally, Microsoft’s Office family of products has been pricey, costing several hundreds of dollars, with one budget-minded offering, Office Home and Student, retailing for between $110 and $150.

But this fall, Office Home and Student can be found for less than $100. And, Microsoft has added Web-based and other Office flavors in order to remain No. 1 in the productivity suite arena.

Listen to Zoho company “evangelist” Raju Vegesna, and you start to understand the dynamic. The company, which started three years ago, recently announced it has 1 million users. He estimates 30 percent of them are students.

“We see at least 100,000 new users every month,” he said. “When we began, initially it took us about a year to get the first 100,000 users, but now we get 100,000 users in a month.”

Google Docs has “millions of active users,” according to Leon Kotlyar, a company spokesman.

“The price of a PC has come down this last four, five years,” says Vegesna.  “Now you can get a PC for $400, but your (Microsoft) Office suite still costs $400, the same price as the hardware. The question is, why do you even want to pay the same price for the software when it is available for free, and much better?”

Microsoft This subscription-based program, for $70 a year, offers Office Home and Student.

Microsoft has different versions of Office at different prices. Microsoft Office Standard 2007, for example, which includes Word, Excel, PowerPoint and Outlook, retails for $400, or is $240 to upgrade from a previous version.

Among the company’s new offerings to entice users, and in particular, students:

Microsoft Office Ultimate 2007. Dubbed by Microsoft as “The Ultimate Steal,” the $59.95 program is available only to students enrolled at educational institutions. In addition to Word, Excel, PowerPoint and Outlook e-mail, it includes Microsoft Publisher and Microsoft Access, a database management program. 

Microsoft Equipt. This subscription-based program, for $70 a year, includes Office Home and Student, as well as Windows Live OneCare, a Web-based security program. It’s worth noting that while Office Home and Student includes Word, Excel, PowerPoint and OneNote (a note-taking and information management program), it does not include Outlook. Currently, Equipt is available only from Circuit City.

Microsoft Office Live Workspace. This free program, which is in beta, or test mode, is considered a companion, not a substitute, for Office. It offers an online collaboration service, akin to Google’s and Zoho’s, letting others review or edit documents.

“It’s hard to compete with free, but Microsoft’s doing a pretty good job here,” said Michael Gartenberg, an analyst who specialized in covering the company for more than a decade, and is now vice president of mobile strategy at Jupitermedia.

“As long as Microsoft can price their stuff competitively, I don’t think we’re going to see this notion of online (software) displace offline anytime in the near future.”