Microsoft sweetens Mac Office offer

The promotion, which runs through Sept. 30, entails a $50 mail-in rebate for people buying a new Mac and upgrading to Office v. X, and $100 for those buying a Mac and the full version of the software. Microsoft is also offering two new pieces of downloadable software: one that lets Palm handhelds synchronize directly with Office v. X and another that lets the Macintosh view programs running on a Windows PC or server.

The offers come after Microsoft revealed that sales of the software have not met its expectations. The software potentate had expected to sell 750,000 copies of Office v. X by now, but instead has sold only 300,000 since the program went on sale last November, according to Tim McDonough, director of marketing for Microsoft's Macintosh Business Unit (MacBU).

McDonough praised Mac OS X and said that not enough Mac owners are aware of the benefits of upgrading--they're caught instead on upgrade costs and the learning curve that comes with a new operating system.

"What we'd love to see Apple do is market OS X to its own users," McDonough said.

Only a small percentage of Mac users have yet to adopt the new version of the operating system. Apple could be experiencing a phenomenon that Microsoft has seen since Windows 2000--namely, consumers don't buy operating system upgrades like they used to. Instead, they upgrade their system software when they buy new computers, and right now, computer sales are weak.

The level of Microsoft's commitment to the Macintosh has come under question as a five-year deal between the two companies comes to a close. In April, Kevin Browne, general manager of the MacBU, said Microsoft will continue to develop Mac products as long as it makes good business sense but refused to put a time frame to Microsoft's commitment. (Browne himself is just now beginning a sabbatical from Microsoft. McDonough said Browne is slated to return to the MacBU on Oct. 7).

Apple, meanwhile, recently has focused its marketing on getting Windows users to migrate to the Mac.

Technology Business Research analyst Brooks Gray said he doesn't think Apple will have much success with its "Switch" campaign, but said Microsoft probably rightly perceives a danger in it.

"I'm sure Microsoft sees Linux and Mac OS as a threat," Gray said. "One of the overall objectives of these companies--Apple and the Linux companies--is to provide an alternative platform that is fully compatible to all Windows applications."

But Mac and Windows systems themselves aren't entirely alien to each other.

With its free Remote Desktop Connection, Microsoft lets a Mac view and interact with programs running on a PC or a Windows-based server on the same network. Doing so offers another way for Mac owners to access corporate data that is stored on a Microsoft Exchange server, something that is not fully supported in Office v. X. That has been a key request of Mac users, Microsoft and Apple officials have said.

"Outlook Web Access was a pretty good interim (method). This is a better interim answer," McDonough said.

"It's not the answer," said Microsoft product manager Erik Ryan. The software maker is still evaluating how to bring Exchange access to Mac OS X. The two main possibilities are to update its Mac OS 9-only version of Outlook or to add Exchange access to the Entourage calendar and e-mail program that comes as part of Office v. X.

While the new software doesn't fully solve the Exchange issue, it does provide a way for Macs in a corporate environment to run all PC programs, without the performance hit that comes with running emulation software.

Also, as it had previously promised to do, Microsoft is offering free software that lets users of the Entourage e-mail and calendar program within Office synchronize directly to a Palm operating system-based handheld.