Microsoft Office 2010 free to Office 2007 buyers

Microsoft's chief financial officer confirmed today that the company will offer a free upgrade to the upcoming Office 2010 suite starting this month.

In a presentation at the Morgan Stanley Technology, Media & Telecom Conference, Microsoft CFO Peter Klein said that the Office 2010 Technology Guarantee program would kick off before the end of March.

Last month, details of the free Office 2010 upgrade program leaked to the web when a Microsoft technology specialist posted information to the firm's partner community site. The site said that Microsoft would launch the Office 2010 upgrade deal on March 5 and run the program through Sept. 30.

According to the leaked information, customers who purchase an eligible copy of Office 2007 during that period will be allowed to download a corresponding edition of Office 2010 for free when the new suite launches in June. Users who want a DVD installation disc will have to pay a small shipping-and-handling fee.

Buyers of Office Home and Student 2007 will receive a free copy of Office Home and Student 2010, while buyers of Office Standard 2007 will be eligible for a free copy of Office Home and Business 2010, a new addition to the Office lineup. Purchases of either Office Small Business 2007 or Office Professional 2007 will be eligible for a free copy of Office Professional 2010.

Although Klein did not specify a launch date for the offer, it will come this month, and likely earlier rather than latter, since he told Wall Street analysts today that Microsoft would defer $300 million to $350 million from the quarter that ends March 31 to cover the costs of the upgrade.

Klein cited the increased integration of SharePoint and Exchange with the suite as a reason why enterprises should upgrade to Office 2010, and pointed to the integration with the impending free Office Web applications as a boon for consumers. "[An] Office [launch] is always a big deal for our company," Klein said. "There's something for everybody in [Office 2010]."

Free upgrade programs are nothing new for Microsoft. Last summer, Microsoft used the Windows 7 Upgrade Option to maintain sales of Vista, giving customers who bought a copy of the soon-to-be-replaced Vista between June 26 and Oct. 22 free copies of Windows 7 when it launched. The company also offered similar deals prior to releasing Office 2007 and Office 2008 for Mac.

Office 2010 is set to ship in June, and will be the first of its suite line to forego less-expensive upgrade editions. Some analysts have argued that Microsoft dumped upgrades to prevent business customers from using a loophole to avoid paying Microsoft's pricey software maintenance fees.

Office 2007 Home and Student currently sells for $104 at Amazon.com, $45 less than the planned $149 list price for Office Home and Student 2010.