Is Microsoft Office that expensive?

I just read in The Register that Australia is cutting it's costs for Microsoft Office. What wasn't so clear in that article was whether or not this cost saving was just a newly negotiated deal with Microsoft, or that they were not going to purchase as many licenses as they had in the past.

The article was short and scarce on detail, but it got me thinking. Microsoft has these large deals with government. They make a ton of money from these enterprise licenses. You can imagine 300,000 seats at even $100 per seat that's a cool $30 million. And I'm sure the deal isn't that sweet. Why, everyone else is buying Office professional for at least $400 (if not more).

John Sheridan is Australia's CTO (I didn't know they had one) and the article says that he doesn't see Open Source as a way of cutting the spending on software costs. I agree with him on that point. Upgrading 300,000 seats of Open Office would not be pretty. Upgrading 300,000 seats of Ubuntu wouldn't be good either. But at a national level, there is some space for Open Source. Open Source does afford some freedom that isn't in the Microsoft commercial world.

Open Source has been traditionally thought to be synonymous with anti-Microsoft. That isn't true any more. A lot of Open Source software is available on Windows as it is on the Linux and Mac platforms. In fact, the quality of the Windows version sometimes is better than their Linux and Mac versions. What has plagued Microsoft has been this insistence on backward compatibility. I'm still able to run a lot of my old 32-bit applications. Not just the recently old (say circa 2008), but software that was around in early 2000 (and even before). Some of those old utilities still seem to work fine.

I'm often disappointed with Microsoft Windows, and Windows 8 is quite disappointing. Other than a better tablet experience, there's no advantage to upgrading to Windows 8. None whatsoever. Office 12 seems to be nicer, but most people working with Office need a keyboard and won't be swiping their text. I found a very nice utility called Start8 which brings back the old Windows 7 desktop, including all the menus. I couldn't do without it. Why upgrade? In my opinion, there's no need to. I can only imagine trying to upgrade a few hundred people from Windows 7 to Windows 8, let alone a few hundred thousand.