It has been about a month since Microsoft released Office 2013 and Office 365 under a new licensing regime. Unfortunately, this new scheme has raised a few eyebrows among users and IT professionals alike. Let’s see if we can figure out what it means.


One of the best explanations of the new licensing scheme is from Ed Bott’s blog post on ZDNet: “Big changes in Office 2013 and Office 365 test Microsoft customers’ loyalty.” In a nutshell, here are the major changes in how Office is licensed:

  • There is no purchasable physical, removable media – when you buy an Office 365 subscription or one of the single user copies of Office 2013, you will receive a product key code. You will have to use your browser to navigate to and download the actual applications.
  • A single user copy of Office 2013 is licensed to a single machine, not to a single user. Officially: The software license is permanently assigned to the device on which the software is initially activated. That device is the “licensed device.” In the event of an under warranty failure, you can ask Microsoft to transfer the license.

As I mentioned in a previous blog post (Microsoft Office 2013 is now available), Microsoft has designed their pricing scheme for Office 2013 with the obvious intention of making Office 365 the more attractive deal. (See Table A)

Table A

Product Office 365 Home Premium Office Home and Student Office Home and Business Office Professional
Price $99.99 per year $139.99 $219.99 $399.99
Number of installations: 5 PCs or Macs plus select mobile devices1 1 PC 1 PC 1 PC
Easy annual subscription: Includes ongoing access to version upgrades, multiple device installs, and Office on Demand services X
Licensed for: Home use Home use Home or business use Home or business use
Core Office applications: Word, Excel, PowerPoint, OneNote X X X X
Email, calendars, and tasks: Outlook X X X
Publishing & databases: Publisher, Access X X
SkyDrive +20GB storage: Save documents online to your SkyDrive for easy access and sharing virtually anywhere X
Personalized experience: Always have your applications, settings and documents accessible when you need them X
Office on Demand2: Stream full-featured Office applications to any Internet-connected Windows PC X
Skype world minutes: Find new ways to stay in touch with 60 minutes of Skype calls each month to phones in 40+ countries X

And as Ed Bott points out, this is a reflection of the new Microsoft approach to the software business. It is also this new approach that is drawing the most ill will from users. In the past week on TechRepublic, we have seen blog posts where IT professionals have publicly announced their defection to alternative choices for their productivity software:

My initial reaction was also one of annoyance, but after a rational look at the scheme, I can see the potential benefits of the subscription approach for both the user and the enterprise. However, I can also see how this change would not sit well with many users and IT professionals.

Poll Results

In my previous blog post, I asked a simple poll question:

Will you subscribe to Office 2013 or get a standalone version?

The chart below shows that Microsoft has not convinced many IT professionals that the subscription model is the best way to get Office.

Even though the standalone version costs more for less features, it is the way readers prefer to receive their software – at least for now. It will be interesting to see how the responses change over time. Is it possible that next year more readers will be subscribing rather than purchasing standalone versions?

Office 365

Before we get too caught up in “one license per device” problem, it is important to remember that there are other options for getting your Microsoft Office software. Office 365 is available under several different subscription models.

And even beyond this chart, there are other choices for larger enterprises.

Bottom line

I realize that for many dyed in the wool Office users like me, switching to a subscription model requires a major shift in perspective when it comes to how we purchase and use our software, but that does not automatically make it wrong or a bad thing that we must rail against. This change by Microsoft is just a reflection of the times we live in – we are living in a networked, always on, cloud-based, software as a service world and we are going to have to come to terms with it – sooner or later.

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