Microsoft Office: To Buy or to Rent, That Is the Question

There was a time when, at least according to rumour, Microsoft made more money – on average – from each Mac user than from each Windows user. That was because most Mac users got copies of Microsoft Office paying the full retail cost, while most Windows users had copies of Windows and Microsoft Office pre-installed on their computers, with Microsoft only getting the deeply-discounted price they charged the computer manufacturers (the so-called OEM – Original Equipment Manufacturers price).

I don’t know if that’s still the case – there are alternatives to Microsoft Office for Mac users: Apple’s iWork applications. Free and open source LibreOffice or Open Office. Online Google Docs. Or simply no office software at all. (Apple’s TextEdit, installed on every Mac, can read simple MS Word documents). And in many cases – both for Mac and Windows users – the alternative to buying a new copy of Microsoft Office is to just continue to run an old copy.

And that’s a problem for Microsoft. While MS Office is the standard – installed on a billion or more computers – most users get a copy either installed at a workplace with a corporate license or pre-installed when they buy a new computer. Rather than upgrade to a new version, users typically wait until they get a new computer – either from their employer or at home. And both business and home users are upgrading their hardware less frequently.

Over the years, Microsoft has pursued a variety of strategies to encourage users to upgrade to the latest (and presumably greatest) version – both the carrot and the stick. Microsoft often promised user interface changes so that hard-to-find features would be easier to use.

With Office 2010 on Windows, Microsoft suggested that companies wanting to hire and retain young, Internet and social media-savvy employees needed to be running up-to-date software.

Microsoft would probably deny that file format changes – making it difficult to for users of older versions to read files saved in the new versions, as happened with Word 98 and Office 2007 – were designed to punish users who stuck with older versions. (And to be fair, the company did release plug-ins to enable at least some older versions to read the new formats – eventually).

Microsoft has just released Microsoft Office – The Next Generation. Two families of releases: Microsoft Office 2013 (for Windows) and Office 365. Home versions launched first on January 29, with Office’s commercial versions launched February 27. Typically Microsoft releases new Mac editions about a year after new Windows versions, so Mac Office 2011 is still the current version for Mac. But the new releases impact Mac users anyway – bear with me.

As with each new generation of Office, Office 2013 brings both interface changes and new features: a new look that is more in line with the new Windows 8 (though it runs on Windows 7 systems as well – XP and Vista users are out of luck). The ability to open and edit PDF files in Word (note that WordPerfect has done that for years); insert online video, and easier table design. PowerPoint users can match slide backgrounds to a colour picked from a photo. Excel users can more easily choose charts and Pivot Tables. Excel’s new Flash Fill and Quick Analysis features could be useful.

No new file formats I’m happy to say.

These changes in the Windows version of Office may be a preview of what will be new in next year’s Mac version. Then again, that’s not always the case.

But as was often the case with earlier Office versions, the interesting story isn’t really about the new features – which in this case are fairly minor. Instead, the real story is about how Microsoft would like you to buy Office and how they’d like to have you pay for it again and again. And this story directly impacts Mac-users, even if they still get the 2011 suite.

Office 2013 refers to the new Windows Office suite. If you purchase this, you make a one-time purchase that (as with previous versions) is good for life. If you’re a Mac users buying a new copy of Office today, that’s what’ll happen if you buy Office 2011. Let’s call this a perpetual license.

There are some differences this time around, though. Microsoft is no longer offering Office as a set of discs in a box; instead you get a serial number good for download and installation of that single version. Initially, the Office 2013 license did not allow you to uninstall your copy from the old system and install it onto the new one. After widespread comment and complaint, Microsoft revised that, giving users back the right they previously had to move their Office license to a new system if needed.

Previously, single purchases could be legally used on several systems – in the case of older copies of Office Professional or Office Home and Business edition, for instance, you could install one copy on both a desktop and laptop or a work computer and a home computer, as long as only one was in use at a time. An Office Home and Student 2010 copy could be installed on up to three computers.

Office 2013 – and now Mac Office 2011 – copies are licensed for use on one computer only. And that means you can no longer move it to a new computer when you get one – the license stays with the old hardware – as has been the case with so-called OEM copies, the ones pre-installed by a computer manufacturer. Mac-users will find that pricing of the Mac Office 2011 has been raised (by 10-17%) to bring it in line with the Windows pricing to US$139 for the Home & Student edition and US$219 for the Home & Business edition.

So licensing terms for home users purchasing Mac Office 2011 or Windows Office 2013 have become more restrictive than previously – and for Mac users more expensive.

Microsoft seems to be discouraging users from purchasing Office. Instead, they prefer users (Mac and Windows) move to Office 365 – to rent Office instead of buying it outright. (Large organizations have been doing this all along, paying an annual license).

$99 gets an Office 365 subscription for a year (there’s also a $10/month option). This includes the ability to download and install the current version of the full Office suite – Office 2013 for Windows or Office 2011 for Mac – onto up to five systems: if desired a mix of Windows and Mac computers. Unlike the purchased Office 2013, you can move these to different computers as needed.

There are other perks for Office 365 subscribers – users are automatically signed onto a Microsoft Skydrive account for cloud storage of documents and files. But while a normal free Skydrive account receives 7 GB of storage, Office 365 subscribers receive an additional 20 GB. (Note however that one Skydrive account is associated with one Office 365 subscription – so if multiple family members are using those 5 computers, they all have access to the same Skydrive account). Skydrive now offers syncing to connected computers – like Dropbox.

And since Microsoft now owns Skype, Office 365 subscribers receive 60 minutes per month of Skype calls to international long distance phone numbers – Skype is already free for computer-to-computer calling world-wide.

Another potentially useful – though Windows-only feature: Office on Demand – an Office 365 user at say, a public computer or a loaner can use Word, Excel or Powerpoint on that system temporarily via online streaming – even if they’ve used all their five installations.

University students can subscribe to a four-year package for $80, usable on two computers.

The February 27 release of business-oriented versions included Office 365 Small Business Premium. For businesses with 1-10 employees, the cost is CDN$168.10 per user per year. It includes, along with the core Office applications (according to Microsoft’s press release): “business grade email, shared calendars, website tools and HD video conferencing in an easy to manage service that doesn’t require IT expertise.”

A Midsize Business version is for organizations with 10-250 employees. It includes: “the enterprise-quality communication and collaboration tools they want – along with the simplified IT tools they need to maintain control while reducing complexity.  Active Directory integration, a web-based administration console and business hours phone support are also included. Pricing is $184.80 per user” (per year).

With the business packages, as with the home packages, “people can now simply sign in to Office 365 from any of their (five) devices, and their documents and personalized settings roam with them, allowing them to quickly pick up right where they left off”.

Note that if you let your subscription lapse, you will have read-only access to your documents. I suspect your Skydrive account would shrink back to 7 GB so you might need to download documents stored in the cloud.

The key question, of course – should you upgrade? And if so, buy or rent?

Frankly, compared to the previous Windows version Office 2010, the improvements to Office 2013, while real, are fairly modest. There’s little reason to upgrade. Then again, relatively few home or small business Office users upgrade in any event.

If you purchase a new computer with a trial version of Office, once the trial period ends you’ll be given options to purchase a full version or to sign onto Office 365. Each has its advantages – buying a $139 Home/Personal license for Office 2011 or 2013 makes sense if you have a few computers and plan to keep them for three or more years.

If however, you have more computers or if you expect to be upgrading your hardware and want to be able to move licenses to the new systems, paying $99 per year to license up to five systems may save money in the long run – and add convenience. As a bonus, if Office is upgraded during that period, you’ll have access to the latest version – no additional charge. (I would expect a new Mac version in 2014, for instance). Microsoft may be moving from producing major new releases every three years or so to adding new features on a more frequent basis – in that case, Office 365 subscribers will always have the latest features.

Note that the Home and Student license for Office 2011/2013 and the Home Premium version of Office 365 do not allow the software to be used for commercial purposes. If you work from home you are expected to purchase the more expensive Home and Business edition. (I don’t have Office 365 pricing for that use).

Microsoft pitched Office 2010 as a way for businesses to better be able to hire and retain bright, young employees – a questionable claim, in my opinion. For home users thinking about Office 365 they’ve got a different tack.

They note that the Internet and computer technology have led to the blurring of home and work lives and that this is increasingly a problem for modern families. Microsoft cites research that found that families depend on technology to stay connected and organized.

I don’t doubt that this is true. The argument falls down for me, though, in Microsoft’s claim that “Office 365 Home Premium will make the everyday more manageable for the modern family”. Their suggestion – that with the cloud connections in Office 365 ‘the entire family can now bring documents, personal settings – and even the Office applications themselves – with them wherever they go”.

Sounds attractive.

But I’m not convinced. First, sharing calendars, posting a grocery list to Skydrive and keeping in touch via Skype are really not reasons to buy (or rent) a suite of powerful productivity programs. As well, families have already been doing that – families with Google accounts, for instance, have long been able to share calendars, documents, and more using that company’s cloud storage and applications. And there’s a big hole in Microsoft’s ‘fully access files and information on any device’ strategy – Microsoft provides full access to owners of Windows and Mac computers and to users of Windows Phone mobile devices; users of iOS (iPhone and iPad) and Android devices get – at best – limited access via Microsoft online Web Apps and iOS apps for OneNote and Lynx.

And far more of those families who are wanting to use technology to stay connected have iPhones, iPads, or Android devices than Windows Phone devices.

Subscribing to Office 365 makes sense – at least for some users – as a way to keep up to date with Microsoft Office on multiple devices. But as a way to keep the family together? I don’t think so!

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