I'm guessing this one isn't going to go over too well with existing customers. How are they going encourage upgrades?

They probably decided they were not going to get that many upgrades quickly even with a lower upgrade price, and that people will up eventually upgrade anyway. Its a reasonable business decision.

@Maximillianos, I use OpenOffice too, but rarely. I actually prefer Lyx and Gnumeric for most things (more of a learning curve, but more productive). I do not think price is the critical factor, and MS has much better marketing, so I doubt OO will take off. In any case, lots of people do get MS Office free.....

What is so good about Outlook? Its a sophisticated email client, but hardly user friendly.

If you are running Echage server to get the calender functions, that is different, but, there are alternatives (Zimbra, etc). There may be alternative clients for Exchange as well.

Its funny how even free OS like Linux cant get a foothold.
I don't think many people use open office say 5%.
Look how long it took free Firefox to get to 30% share !
So a free open office won't worry Bill either.
But I do think it is unfair not to offer an upgrade for the current users.
Office has reached the point where they cannot add any more useful features, so each new upgrade becomes less necessary.

Two years ago I switched to iWork and Mac Mail and haven't looked back. MS continues to alienate customers. Open Office was never a real option for us as the limitations that it had.

I'm amazed by how many people seem to think the most important feature of Outlook is it's e-mail client.

E-mail can be handled by uncountable software options.

All medium/big businesses I've been employed were using Outlook mostly for it's extreme planning functionality. It's a breeze to set up meetings, invite others, look at eachother agenda's and tons of more functionality.

It's all about the extra's...

Now you can purchase Office 2007 and then upgrade to the 2010 Version FREE of charge in October 2010 so there's no reason for people to wait for 2010 to be released.

That's good advice. It may be the last upgrade you can get for Office.

yeah, i saw a new pricelist this month and i can see no upgrade product available for office 2010, only an option with an offer mentioned by thriftgirl62 for retail clients and for volume license customers only an option to upgrade if they have SA (Software Assurance) purchased with Office 2007. So this move i think is also to push SA purchase of all future Microsoft products which comes at a price.