The U.S. opening is part of Microsoft's ongoing expansion into the direct online sales market. In June, the company announced Microsoft Stores in the United Kingdom and Germany. Another store portal already exists for consumers in Korea.
Microsoft plans to launch store portals for other countries over the coming year. The company's short list includes creating stores for France, Japan, The Netherlands and Spain.
The new online stores would seem to be a blow to Microsoft's retail partners operating actual physical stores. Brick-and-mortar retail stores have faced a general contraction, with Circuit City announcing Chapter 11 bankruptcy restructuring just last week and CompUSA having already closed many of its retail stores. Consumer retailer Best Buy did not respond to a press inquiry on how its stores may be affected.
Microsoft put its best face on the matter in a press release. The company suggested that "retailers will be able to compete with the Microsoft Store through special pricing, discounts, and the ability to draw from a range of products beyond what Microsoft offers." That idea comes from Larry Engel, general manager of Microsoft Store & Marketplace, as cited in Microsoft's press release.
Retail stores already faced competition from Windows Marketplace, an online portal that offers more than just Microsoft software titles. But Windows Marketplace will soon disappear, according to Trevin Chow, Microsoft's senior program manager, who was in charge of helping to create Microsoft Store.
"With the launch of Microsoft Store, Windows Marketplace will be shut down as an e-commerce site," Chow wrote in his blog. "The 'Digital Locker' service will remain operational through the first half of 2009, and we'll be sending out emails and web communications to help customers with any transition away from Digital Locker."
Digital Locker helps users to store their software license numbers online. Microsoft has a similar feature in Microsoft store. Chow wrote that Microsoft Store ESD customers can redownload the software throughout its lifecycle, which is typically about five years. The customer's product key is stored in the user's Accounts page at Microsoft Store, enabling subsequent downloads.
Microsoft intends to offer its products at Microsoft Store at the manufacturer's suggested retail price. Engle suggested that customers will still flock to Microsoft Store because of the "immediate satisfaction of purchasing, downloading and installing these products within minutes."
At present, you can have the satisfaction of paying for and downloading Microsoft Office 2007 Professional for $499.95 at Microsoft Store or Windows Marketplace. You could also get the boxed copy of the software at that same price, plus shipping, from Best Buy.
Alternatively, you could cut your costs and get a boxed copy of Microsoft Office 2007 Professional through Amazon.com at $379.99 with free shipping, for a net savings of $119.96.
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