Microsoft is planning to offer parts of its office suite for free. Currently you can get office 2010 beta free from Microsoft's website, until its full release later this year. Also available is browser based office software. This is meant to now compete with Google apps currently in place. They have the advantage in keeping compatibility and familiarity.
The next step is to put lite versions of word and excel onto all new computers, office starter. These will be limited uses applications. The hope is that users will upgrade to the full version. Anti-trust anyone? This starter pack will be used in place of the works suite which currently comes on windows pc's.
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