Microsoft is worried that it may face an uphill struggle selling copies of the next version of Office.
"One of the biggest challenges is to fight that perception that old versions of software are good enough," said Microsoft's Chris Capossela, speaking to the BBC.
A new version of Office for Windows ships this month, a new Mac version isn't expected until next year.
The company is touting a new user interface as part of its appeal to convince 400 million users to upgrade to the revised suite - but Office alternatives are gaining on the company's offering.
Free cross-platform software, OpenOffice, is in use by 40 million users today, the report reveals.