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Office 2007 sales spur software market

Microsoft's office suite, which also celebrates one year on the consumer market Wednesday, has been tearing things up at retail, leading software levels to their highest point since 1999.

Spurred by sales of Microsoft's Office 2007, the software market hit its highest level since 1999, according to a report released Wednesday by the NPD Group.

Overall, the U.S. non-game PC software market at retail stores totaled $3.3 billion in 2007, a 15 percent increase over the $2.9 billion generated in 2006. The rise is even more notable, as sales had been essentially flat from 2000 through 2006.

But, a whole lot of that is due to Microsoft, largely because of Office, but also because of Vista's debut. According to NPD's Chris Swenson, 80 percent of the total growth in the market can be attributed to the release of those two products. Also of note, security software sales increased 55 percent compared with the prior year, Swenson said.

Although boxed copy sales of Vista have been down over XP's first year, they were nonetheless up 40 percent from last year's Windows sales.

Sales of Office 2007 are doing even better, up 100 percent compared with sales of Office 2003 in its initial months. That led Office to account for 17 percent (by dollar volume) of all software sold at retail stores last year.

"It's a huge hit," Swenson said.

Swenson also noted that NPD is not seeing significant sales of boxed copies of Windows XP, suggesting to him that the downgrade phenomenon is overblown. "I don't think people can do it in droves, even if they want to," Swenson said, noting that fewer retailers are even carrying the older Windows XP these days.