Microsoft’s plans to offer Office 2013 as part of Office 365 have been known for quite a while; how the products will be priced and offered was still unknown. Yesterday, Microsoft shared their strategy for getting Office 2013 to the users and Microsoft has prepared itself for a new connected and multi-PC environment. As mobile apps and web apps have started giving Office some competition and drastically change user habits, Microsoft had to come up with a new model to keep Office’s prices down for existing customers and attracting new ones.
Microsoft is probably among the first companies to offer a largely used product to a non-enterprise customer through the Software as a Service model. The subscription method brings with it a baggage of terms and conditions, what you can and cannot do; it’s complicated. Microsoft on their part has done a lot to un-complicate this part; here’s how:
(I’m using the chart by The Verge, since it’s one of the simplest I’ve come across.)
The thing about this chart as pointed out by veteran Ed Bott is, Microsoft has made it very uneconomical for users to buy the traditional boxed packages. Here’s why:
Traditional Box pack: (Home & Student–No Outlook)
1 license: $140 (3 years cost=$420)
Also, Microsoft no longer offers the buy 1 pack & use on 3 devices, which means for 3 years: 3×420=$1,260
Subscription: (There is no Home & Student, but Home & Student Premium)
1 subscription gives you 5 licenses with SkyDrive Premium, Outlook, Skype benefits at $99/year. So for 3 years, all this comes at $300 for 5 PCs.
Opting for the standalone boxes now makes no sense at all. Most of users get Office bundled with Windows on our new PCs, I believe OEMs will start offering 1 year free subscriptions with new PCs which might reduce licensing costs for OEMs and ensure customers stick to Office 2013.