Single-License Office 2013 Will Drive Users to Google Docs: Breaking Analysis

Microsoft recently changed its Office Home and Student 2013 end-user licensing agreement.  Instead of being able to install the retail version of the Office 2013 to another PC, in case the one where you originally installed it breaks down or gets stolen, you need to purchase another Office 2013 to use on a new or other device.

EULA for Office Home and Student 2010 allowed users to reassign the license to a different device, any number of times, as long as it is not done more than once every 90 days.  But if your computer breaks, you can reassign the license sooner.  Reassigning the license makes the new device the licensed device.

So what does the new EULA exactly mean?  It means that if your computer dies, Office 2013 dies along with it.  You need to purchase a new one.

“This is stricter language than was available before,” said Paul DeGroot, principal consultant at Pica Communications, and like Ullman, a licensing guru. “According to this language, if your computer dies, so does your Office license. Microsoft has had that language in place for OEM software in the past, but not for retail licenses.”

Is this good for Microsoft?


Yes, especially given the fact that the majority of its revenue comes from sales to businesses who go for the multi-year subscriptions or Software Assurance plans.  Only 20 percent of its revenue comes from consumers who buy boxed copies of Microsoft products online or in retail stores.  This is also a way for Microsoft to push consumers to shift to the Office 365 subscription model, who, for $99 a year, can use the Office 2013 on up to five PCs.  And if users decide to decommission a PC, the licenses can be moved to new PCs.  The $99 per year price point seems affordable, but then there’s the price hike and additional restrictions on perpetual licenses to consider.

Microsoft is also streamlining its licensing.  This recently implemented single PC constraint has been around for a very long time but Microsoft implemented it for businesses, corporations, or OEMs that ship products pre-installed with a Microsoft product.  This move just brings the licensing terms to consumers.

“This is no surprise to me,” Daryl Ullman, co-founder and managing director of the Emerset Consulting Group, which specializes in helping companies negotiate software licensing deals, said.  “Microsoft has been doing the same kinds of licensing policy changes for corporations. And they’ve brought these same [policies] down to the consumer level.

“They’re very smart about maneuvering or changing licensing to meet a business goal,” Ullman continued. “As I’ve said before, I see Microsoft as a licensing company first, and second as a technology company. It’s not that they don’t have good technology, but they’re driven by, consumed by, licensing.”

But is this good for consumers? NO.


First off, Microsoft could very well upset consumers who are very vocal and won’t take the news passively.  Consumers know their rights and they are not about to spend money on something that they can no longer use if they decide to upgrade to a new PC.

“There will be a body of people who will be impacted by this and that will be the kind of people that do a lot of migrating software between systems,” SiliconANGLE contributing editor John Casaretto said at this morning’s NewsDesk show with Kristin Feledy (full video below).

“That might be common for a certain group of people but it’s not really the main strain thing.  Most people buy a machine, get a certain life out of a machine, might be three or four years, maybe five years.  We are starting to see accelerated cycles, PCs coming in and out.  I think that there will be a body of people who will get upset but I think Microsoft just kind of looked at this and decided that going forward, this has to be done for greater goals of getting people towards Office 365.”

Second, not many are fond of the idea of a subscription model, wondering if they’re being ripped off, paying more than they should compared to just buying the retail version.  Even if the subscription model is cheaper than the retail version, that won’t automatically make consumers switch over.  They could just think that Microsoft is focusing on businesses rather than consumers.

Third, this move just might deliver the opposite effect Microsoft intends.  Instead of subscribing to Office 365, people may just start using Google Docs.  Consumers aren’t likely to pay for a subscription when there’s a better, free, alternative.

For more analysis on Microsoft’s latest, see Casaretto’s full segment from this morning’s NewsDesk show below: