Let's face it, for 99.9% of home users, Libre or Open Office is more than adequate. They don't need to exchange documents with others and home documents are typically far less demanding than work documents. GoogleDocs will work too if they want a cloud solution. The point is MS Office is massive overkill at home.

For students I guess it really depends on your school. They are a special category and they get special pricing anyway. I can see the subscription model being ideal for them. They can use it while they're in school and then jump off to Open, Libre, or Google when they're finished with school.

The situation is a lot more complex for businesses. Small businesses that don't need to exchange documents with outsiders could probably get along just fine with the free stuff. It gets harder for bigger businesses or anyone that has to exchange electronic copies with clients. MS Office is the defacto standard, so you have to have it if you expect to be viewed as a professional organization. I don't see big businesses using the online version though. The big boys will use installed copies.

It brings up another thought though. If you had an office of a couple hundred folks using the cloud version, how would that impact the network? Would everything slow to a crawl? Could be a hidden "gotcha".