Bundling is not enough
The conventional wisdom with a lot of the software industry is that Microsoft can just bundle any reasonably decent application into the Office suite, even if it's not the best in its category, and it will have the same effect that bundling an application into Windows has: market dominance.
I was flipping through a pile of old CDs that I have around, though, and there's a lot of evidence that Office isn't nearly as effective a tool for domination through bundling. Anybody other than me remember Microsoft Vizact? What about PhotoDraw? (PhotoDraw actually made to a version 2.0) How 'bout the Office Photo Editor, which Dvorak so lamented? On the Mac side, FrontPage used to come with Office, but it's dead now too.
There's an even wider array of failures if you just count ancillary programs that connect to Office. Outlook Mobile Manager was discontinued, only to be replaced by Mobile Information Server, which was also discontinued.
As a developer, it's scary to see Microsoft abandon so many platforms that presumably cost them millions of dollars to develop. But as an end-user, it's a nice reassurance that there are still some balancing forces in the desktop productivity market.
There's lots of other general productivity software that's died on the vine at Microsoft, too. I used to sell Microsoft Profit, their small business accounting package that was written by Great Plains (in Visual Basic, no less!) about a decade ago as a precursor to Microsoft's acquisition of the company. Some transparently defensive product acquisitions died, such as Liquid Motion, though that's less of a surprise.
There are even failures of programs that were aimed at business users but shipped with Windows itself. Schedule + came with Windows 95 (and its precursor, Windows for Workgroups 3.11) but evaporated soon after.
Even the most ambitious bundling Microsoft has ever done, shipping the Microsoft Exchange client (later renamed Windows Messaging) with Windows 95, didn't really go anywhere, and Microsoft ended up settling for Internet Mail and News, later renamed Outlook Express, as the primary messaging client on Windows machines.
Of course, being bundled with Office never hurt an app's chances. And that's a good thing, since some of the most creative and interesting apps Microsoft has done lately, such as InfoPath and, especially, OneNote, deserve a good chance. Interestingly, those two applications are the ones that companies are mostly likely to have to buy separately from their existing Office licenses, since they're not bundled with the majority of the suites that Microsoft ships.