Office 2013 is going to be, for most users, a fairly minor evolution of Microsoft's flagship productivity suite, except for one little thing: with Office 2013, Microsoft is pitching Office subscriptions to consumers.
The company has already been courting enterprise users with its Office 365 platform for a little over a year now. There are multiple price tiers, with enterprise users getting some combination of Exchange, SharePoint, Office Web Apps, and the desktop Office suite.
In addition to these enterprise-oriented offerings, the company today unveiled two non-enterprise plans. For $99.99/year, there's Office 365 Home Premium, giving Word, Excel, PowerPoint, OneNote, Outlook, Publisher, and Access, plus an extra 20 GB of SkyDrive storage (in addition to the 7 GB that you get for free), plus 60 minutes of Skype calls per month. This is licensed on a per-household basis, and one account can be shared by up to 5 users across any mixture of five PCs and Macs.
The other new subscription is the $149.99/year Office 365 Small Business Premium. This adds Lync and InfoPath into the software mix, but changes the cloud services. Instead of SkyDrive and Skype, Small Business Premium users will get a 25 GB mailbox, shared calendaring, 10 GB of shared (company-wide) storage, and another 500 MB of storage per user. This is licensed per user, but that user can install on any combination of PCs and Macs, again up to a total of five systems.
Microsoft hasn't released the full details of the subscription schemes. What happens to your data after your subscription expires, for example, is unknown at this time.
Update: Microsoft tells us:
- Your Office documents are always available on your devices and SkyDrive, even after a subscription expires.
- For consumers, if a subscription lapses, Office client apps will go into read-only mode after a grace period, allowing them to read, print, copy and download their documents. They’ll also be able to use them with Office Web Apps.
- Organizations on Office 365 will have a grace period to download their data and save it to another location. Office client apps will also remain in read-only mode, allowing people to read and print documents they have downloaded. They’ll also be able to use them with Office Web Apps.
This is just a first tentative step into the world of home user subscriptions, and for those not willing to bite, Microsoft will offer traditional perpetual licenses. Office Home & Student, for $139.99, starts with Word, Excel, PowerPoint, and OneNote. Office Home & Business adds Outlook, for $219.99. And Office Professional will give users Publisher and Access as well for $399.99. All are licensed on a per device basis, and can be installed on one PC (or, for Home & Student and Home & Business, a Mac).
Office 2013 is still in beta, but Microsoft has said that the final version will start shipping to Windows RT users in November. The more-capable Intel-compatible versions seem likely to arrive some time later: starting October 19, anyone buying Office 2010 or Office for Mac 2011 will also qualify for an upgrade to the equivalent version of Office 2013.
Is there actual value in these subscriptions?
Subscription software of one form or another has proven popular in the enterprise (whether it be cloud services, like Office 365, or subscriptions to desktop software, such as Microsoft's Software Assurance scheme). But so far it's a rarity in the consumer space. Anti-virus software has tried to bully and cajole users into getting aboard the subscription train, but the large number of users with out-of-date anti-viral protection suggests users are resisting.
The company offers various scenarios to illustrate how the subscription pricing ends up giving you more functionality for less money; if you use multiple computers, or care deeply about always having the current version, the subscription prices do tend to undercut the perpetual licenses. However, this is largely due to the changes the company has made to the pricing of those perpetual licenses.
Households, in particular, face a steep price rise. Office 2010 has two Home & Student editions. There's a single user, single PC version for $119.99, and a per-household version good for three PCs, for $149.99. The perpetually licensed 2013 equivalent is $20 more than the single user, single PC edition, and there's no perpetually licensed household edition at all. The new household subscription does allow the use of five PCs instead of three, but you're going to be paying that $99 every single year. Assuming Office continues to be updated every three years or so, that's going to cost a three PC household about $300 every three years, instead of $150.
Similar pricing breaks were available for multiple copies of other editions of Office 2010; they too are now gone, with similar results. Office is, for many users, going to get a lot more expensive.
With these changes, Microsoft gets to push the subscriptions as "better value"—the full Office suite for five PCs for $99 per year, instead of $2000 for five perpetual Office Professional licenses—even though they're considerably worse value than the Office 2010 pricing offered. If you don't want to incur recurring charges, and just want the confidence that comes from buying now and using the software indefinitely, you're going to pay, possibly a lot more, for the privilege.
Sure, Microsoft argues that there are various sweeteners in the deal—subscribers all get Outlook, Publisher, and Access, for example, which weren't previously available in the Home & Student edition. But if home users have been happy without those applications in the past, that's probably a sign that they don't really need them now. Microsoft wants it both ways, it seems; on the one hand, it maintains that what it calls the "Core Office applications" (Word, Excel, PowerPoint, OneNote) are all home users and students should want or need. On the other, it's claiming the extra applications are, in fact, valuable and worth paying the extra. Either they're not that valuable after all, or the Office Home & Student product is deficient in important ways and nobody should have been using it (or, for that matter, selling it) for all these years.
As another incentive to subscribe, and one that might leave a bad taste in the mouth, the company says that subscribers will be given unspecified "updates" to add new features and capabilities over the life of their subscription. Perpetual licensees will only get bug fixes and security updates.
On top of all this, you might not even need to buy Office to use it at home. When licensed through Software Assurance, enterprises can, for a small additional fee, obtain access to the "Home Use Program." For $9.95 per license, anyone entitled to use Office at work can also use that same edition of Office at home. Even if the employer passes that cost on to the employee, it's plainly a great deal cheaper to go that route than it is to buy any of the other licenses.
The Small Business pricing, though a bit steeper, seems more compelling. Small businesses never had a deal as good as the three-for-$150 edition, and are more likely to gain value from applications like Access, and features like shared calendaring. The model makes more sense for this market.
The other way to get Office
With this pricing, Microsoft is not only bringing subscription pricing to home users; it's also bringing an incentive—an incentive that's arguably more stick than carrot—to abandon the perpetual licensing. The big question is whether consumers follow their enterprise counterparts onto the treadmill. The risk for Microsoft here is not that they don't go for the subscriptions; it's that faced with a bunch of unappealing options—being on the hook forever with the subscription, or paying through the nose with the perpetual licenses—users may decide they don't need Office at home at all.
At least, not for their PC. Because there is a third way of getting Office: Windows RT. Windows RT will ship with Office Home & Student. Just those four core applications again, but they come built-in, for no additional cost. Perpetually licensed, with no subscription. They'll be an expensive way of getting Office Home & Student, certainly (we don't know the pricing yet, but it'll be more than $139.99, that's for sure). But it could be a nice cheap way of getting a whole new computer with a "free" copy of Office.
We haven't been convinced of the amount of value that Office actually adds to Windows RT. If people buy Windows RT devices just for browsing the Web, sending a few e-mails, and watching videos, the presence of Office won't be that big a deal. But if Windows RT becomes the best way of getting Office in your home, the pressure to use Windows RT tablets for more, and the value that Office RT adds to the package, becomes that much greater.
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