Bundle Applications into 'Microsoft Office'

Setting

Microsoft has successful individual apps: Word, Excel, PowerPoint. Competitors (WordPerfect, Lotus 1-2-3) are strong in specific verticals. Microsoft realizes that business customers use all these tools.

People

• Responsible: Mike Maples, Bill Gates
• Approvers:
• Consulted:
• Informed:

Alternatives

Option A: Sell Apps Individually (Best-of-Breed)

Pros:

• Higher margin per unit.
• Standard industry practice.

Cons:

• Allows competitors to survive in niches (Lotus in spreadsheets, WordPerfect in writing).

Option B: Bundle as a Suite (Office)

Pros:

• Massive value proposition ("Get 3 for price of 1.5").
• Locks out competitors (users won't buy Lotus if they already have Excel in the bundle).
• Standardizes the UI/UX across apps (common menus).
• Cross-app integration (OLE).

Cons:

• Cannibalizes individual sales.
• Antitrust concerns (bundling).

Decision

Chosen: Option B

Rationale: The "Suite" is the product. By integrating them and discounting the bundle, Microsoft creates an unbeatable moat. It's the "cookie cutter" strategy—once a business standardizes on Office, they never switch.

Consequences

Positive

• +Office becomes the dominant productivity standard.
• +Generates massive, recurring revenue.
• +Kills Lotus and WordPerfect.

Negative

• −Antitrust scrutiny increases.