Microsoft Tells Some Customers – Don’t Buy Office 2013 – w/ New Microsoft Office 365 Subscriptions

As Microsoft continues its rather public evolution, some recently announced pricing models for Microsoft Office 2013 and Office 365 are set to change the way people think about buying Office altogether.

The new Office 365 offerings consist of a subscription-based model that offers cost options to users across the spectrum. The Office 365 service has in fact seen a revamp in what’s known as “Wave 15”, which introduces a number of new features including Office on Demand, SkyDrive integration, Skype minutes, a “Metro” interface (technically not supposed to call it that), and rather importantly, support for public folders. Public folders had represented a challenge for customers and system integrators as they were not previously supported and were a sign of Microsoft’s ongoing attempt to slowly turn the lights out on this antiquated sharing construct. Now with support of this feature, overcoming legacy public folder alternatives is no longer such a significant challenge. This can be expected to speed up adoption across the small and mid-market business environments. For the home user, the offering of Office 365 Home Premium features access for up to 5 devices in one household. For the small business subscription, a per user model is utilized for access to the Office 365 productivity suite.

The move to a subscription base makes sense business-wise. A portion of the revenue from the Office products altogether can now become consistent on a monthly, quarterly, and yearly basis. This marks a shift from traditional software purchase cycles for Office products.

For many in the small business and home office crowds, the upfront capital required to purchase Office for users is eliminated with the Office 365 subscription. It also unleashes the usage of Office from just one device to several including tablets and laptops. This change in dynamic essentially shifts the product from one that is owned to a consumable service. That is rather significant move that fits right along the arc of changing strategy focus at Microsoft. Going up the scale however, there are still a number of cases to be made across different markets for traditional Office 2013 purchase. For one, control of the Office experience to an organization could be a key differentiator. Also the Office 2013 suite offers a number of nifty features like backup features that are integrated and based on the company’s SkyDrive brand. Another interesting element to consider is that the forthcoming Windows RT – ARM-based tablet devices will include Microsoft Office 2013 RT- consisting of core productivity apps from the Office suite.

Here is a brief breakdown on the pricing options:
Traditional Office suite:

  • Home & Student ($139.99) (1 Mac/PC)
  • Home & Business ($219.99) (1 Mac/PC)
  • Professional ($399.99) (PC Only)

Office 365:

  • Home Premium ($99.99/year per household)
  • Small Business Premium ($149.99/year per user)

It can be a lot to think about. Indeed, Microsoft licensing in general can be complicated and it may take a guided, reflective analysis of usage, devices, and needs to really come up with the best strategic licensing option for any given organization. It can be so confusing that there is even a tech specialty that is dedicated to Microsoft licensing, but breakdowns of price points are sure to be found on the net already. The bottom line is Microsoft is clearly moving towards pushing a big part of Office into the cloud and Office 365 through price advantages while delivering full features. With Windows 8 on the way, the integration, look and function of Office into the environment is an inexorable tie to the full experience.

About John Casaretto

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