Charge less, own the market
MS Office is way over bloated. There just isn't anything else they can bolt on that has much value. If they put it on subscription for $25/£20 per year or less for free updates (no payment otherwise), nobody else could develop half the product and market it for less. What would be left is a world with one office suite. Any competition would only be viable in very specific vertical markets and most of the big ones already have Office extensions.