Microsoft’s Bundling Policy

Microsoft has an interesting bundling policy. Microsoft sells the Office suite of software very differently across the world. The Office Suite consists of Word, Excel, PowerPoint, and Outlook. The suite is one of the most widely used work-related or productivity software in the world.

As with most popular software, the Microsoft Office programs are also one of the most pirated software. The company has admitted that piracy helps their business since users are more likely to purchase a legitimate version in the future.

However, Microsoft officially still takes an aggressive stand against piracy. As recently as March 2016, Microsoft asked a federal judge to subpoena Comcast to help identify pirates. This approach can work pretty well in the United States, but it is often much harder to do in developing countries.

To combat this piracy, Microsoft sells stand-alone programs like Word, PowerPoint for a lower price than the entire Office Suite. This strategy makes sense, but when you realize that in some countries the Office Suite is cheaper than purchasing just one single program like Word or Excel.

Using the Real Exchange Rate, I was able to calculate what the price of the bundle and the stand-alone would be in US$.  This allows me to compare where Microsoft office is the cheapest. I can then compare rates to see if their pricing strategy is related to the piracy rate in that country.

Microsoft Office Pricing

Real Exchange Rates - Microsoft Office
Software Piracy Rates by Country

Effect of Microsoft’s Bundling Policy

By choosing this kind of pricing, Microsoft forces you to choose the product they want you to buy.

For example: in the Eurozone countries, you are better off buying the bundle that an individual program. However, in countries like India and Russia where piracy rates are high, you might just buy the stand-alone application. The Office Suite and Standalone programs are cheapest in Russia and most expensive in Japan.

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