Smaller retailers ho-hum about Office 2000
- 02 June, 1999 13:05
While Microsoft may hail the June 10 launch of Office 2000 as "possibly the biggest retail opportunity of the year" (ARN April 7, page 12), smaller retailers do not expect the same rush generated by the big launches of the past.
Microsoft, however, is expecting a significant spike. An indication of mass merchant confidence was Harvey Norman's announcement last week that it had placed its third-biggest software order ever. It is putting $4 million worth of the product on the shelves of 87 stores across Australia.
Microsoft's introduction of a technology guarantee, giving all late life-cycle buyers of Office 97 a "free" upgrade (at a $15 postage and handling cost), and a cash-back offer has meant there hasn't been a drop-off of sales before the launch of Office 2000.
Phil Webb, managing director of catalogue retailer International Software Warehouse (ISW), said Office 97 is still selling consistently which he put down to the technology guarantee.
"We are still selling Office 97 as soon as we can get a hold of it," Webb said. "But they have an attractive offer at the moment."
Webb expects Office 2000 to sell well and will allocate an appropriate amount of space in ISW's physical and virtual catalogues. "It is a Microsoft product so they will make sure sales happen and we are expecting to sell quite a lot of it.
"We are currently talking to distributors to get the best deal and will be placing one big bulk order very soon, but Microsoft seems to have delayed all the hype about it until the last moment."
Webb says Office is one product you don't have to discount. "It will sell, whatever it is priced at." However, as a commodity product he concedes that the only differentiator for some as to where they buy it will be price.
In Tasmania, Euan Hills, managing director of Computerland Hobart, said he hasn't seen a lot of hype for the new version of Office. As a corporate and government reseller, he says the most consistent comment he hears from his customers is that they will wait and see what bugs emerge before rolling it out.
No sales drama
"There has definitely not been any drama in terms of a sales drop-off in recent weeks because of the free upgrade," Hills said. "My customers are aware of it and have a technical interest in it, but they are a bit hesitant to roll it out in their organisations until they are confident it is fully debugged.
"That is a common theme I am hearing," he said.
Rychard Borysiewicz, national product manager for computers with Ted's Computer Whiz, said most of the people tempted by Office 2000 are happy to take the current version with the upgrade offer.
He is not expecting a great rush, but said any new Microsoft product is going to attract attention when it is launched. "No retailer can afford not to have it on its shelves," Borysiewicz said.
In the education market, the University of Technology Sydney's busy campus store, Bits & PC's, has seen a lot of Office sales over the years.
Manager Peter Regattieri said there had not been a great deal of interest in Office 2000 which he put down to the technology guarantee.
"I don't think it will be a big seller on launch in my marketplace," Regattieri said. "People have still been buying Office 97, they haven't been holding off. If they were holding off, I would assume that they were waiting for June 10, but I am not seeing that.
"They know they are going to be able to get an upgrade for $15. I think that has been a good move by Microsoft because it has allowed Office 97 to maintain a good run rate of sales.
"I applaud them for doing it. It is a very effective way of keeping customers and resellers satisfied, but obviously it lessens the impact of the launch," Regattieri said.
Ben Graetz, Microsoft's Office 2000 product marketing manager, was surprised that some smaller retailers weren't that enthusiastic about the launch.
As a boost for retailers, he revealed that Microsoft will have a $50 cash-back offer to all retail buyers of the upgrade.
"We are expecting huge sales on launch across the board," Graetz said. He added that the vast majority of sales will be for customers who are upgrading and that there has been a lot of advance demand for large multi-seat licences.