Hewlett-Packard is booting Microsoft Office software from its Pavilion line of consumer PCs in favor of software from Corel, as more PC makers consider cheaper Microsoft alternatives. The deal, announced Monday, marks a significant win for the scrappy Canadian software maker. HP is currently the largest manufacturer of PCs in the world and commands more than half the U.S. retail market. Under the deal, all Pavilion desktop PCs will ship with Corel's WordPerfect Productivity Pack starting next month. The Productivity Pack is a "productivity suite," similar to Microsoft's Office, that includes the WordPerfect word processing application and the Quattro Pro spreadsheet program. Currently, Pavilion PCs come with a choice of the full version of Office XP or Microsoft's stripped-down consumer alternative, Works.

Corel is discussing possible expansion of the deal with HP, said Steve Houck, executive vice president of strategic relations for Corel, including options for adding WordPerfect to the Presario line of consumer PCs that Hewlett-Packard picked up in the Compaq Computer acquisition. HP's shift underscores a race among consumer PC makers to cut costs from their software budgets.