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Office 2013: Pricing and Packaging

Sep. 17, 2012 Paul Thurrott | Paul Thurrott's Supersite for Windows

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With Office 2013, Microsoft is moving its most dominant product line to an attractive new subscription-based pricing and packaging model. Yes, you’ll be able to acquire Office 2013 the old-fashioned way. But the benefits and pricing of the subscription plans are so attractive you won’t want to.

What’s attractive, you ask? The Office 365 Home Premium subscription, which includes Word, Excel, PowerPoint, OneNote, Outlook, Publisher, and Access, SkyDrive with an additional 20 GB of storage, and 60 minutes of free Skype calls each month, will cost just $99.99 a year. This subscription comes with a new “household license,” meaning that you can install the PC applications on up to 5 PCs (or Macs) around your home. Yes, that’s right: Microsoft is explicitly supporting installing and using Office on up to 5 different users’ PCs.

Luddites will still be able to buy individual retail copies of three Office 2013 suites, or acquire the software that way with new PCs. But why would they? Office 2013 Home & Student will cost $139.99, can be installed on just one PC, and only comes with Word, Excel, PowerPoint, and OneNote.

Assuming you only need those applications, it would cost you about $700 to purchase five copies of this suite for your family. For that amount of money, you could subscribe to Office 365 Home Premium for a full 7 years and, during that time, benefit from all of the upgrades that occur, including whatever full new Office versions are released. Combined with the additional benefits of the subscription, it’s a no brainer.

So let’s examine the offerings in a bit more detail.

Office 365 Home Premium

This $99.99 per year subscription offering covers an entire household. It’s not tied to a single person, or account, and each person that uses the service and applications can sign in to their own Microsoft account with its custom online document store, settings sync, and more. You can use Office on up to 5 PCs (or Macs), and switch which devices are activated on the fly. PC-based subscribers get Office 2013 Word, Excel, PowerPoint, OneNote, Outlook, Access, and Publisher, while Mac users get Office:Mac (whatever the current version is).

Office 365 Home Premium subscriptions come with a number of benefits. The software installs are delivered via Click-to-Run, which takes just a few minutes. But more important, the software is always kept up-to-date, not just with bug and security fixes, but also with the latest new features and services: Microsoft says that it will add new capabilities to Office 2013 “multiple times per year,” as it would with any service. The days of monolithic software are over.

Additional benefits include 20 GB of additional SkyDrive-based storage (for a total of 27 GB), which I assume applies only to the account that signs up for the subscription, and not for all accounts that access the software installs from that subscription. (That is, the 20 GB of additional storage is for one account, not for up to five accounts.) You also get 60 minutes of Skype-based world calling per month. And you can access the Office on Demand service to temporarily stream any of the supported Office applications temporarily to any PC in the world (assuming it’s online).

Office 365 Small Business

This $149.99 per year subscription offering is licensed per user, but also covers up to 5 PCs and/or Macs. Aimed at small businesses with 1 to 10 employees, Office 365 Small Business utilizes Office 365 backend services—Exchange, SharePoint, and Lync Online—rather than the SkyDrive-based services used by the Home Premium subscription. So while you basically get all the benefits of the Home Premium subscription, there are additional benefits and features as well.

On the client front, Small Business subscribers gain access to the same Office 2013 applications as Home Premium—Word, Excel, PowerPoint, OneNote, Outlook, Access, and Publisher—but also get Lync and InfoPath, or, of course, Office:Mac.

In the cloud, you get a 25 GB Exchange Online mailbox with shared calendaring, contacts, scheduling, and task list, and 10 GB of SharePoint Online-based cloud storage for the organization with an addition 500 MB per user account. You can host online meetings with audio, video, screen sharing, and HD video conferencing using Lync Online, and can set up, build, and maintain a public-facing web site with custom domain for no additional fee.

Traditional Office 2013 suites

Not interested in a subscription offering? No worries: Microsoft will still provide traditional retail suites for Office 2013.

Office 2013 Home & Student

This offering is licensed for one PC and will cost $139.99. It includes the core Office applications only: Word, Excel, PowerPoint, and OneNote.

Office 2013 Home & Business

This offering is licensed for one PC and will cost $219.99. It includes Word, Excel, PowerPoint, OneNote, and Outlook 2013.

Office 2013 Professional

This offering is licensed for one PC and will cost $399.99. It includes Word, Excel, PowerPoint, OneNote, Outlook, Publisher, and Access 2013.

Final Thoughts

With Office 2013, Microsoft is embracing a brave new world of pricing and packaging, and it’s a win-win. For Microsoft, this version represents the ongoing, regular subscription fees it’s always desired. But it’s even better deal for consumers and small businesses: For a low monthly fee (a bit over $8 for consumers), you get the full power of Office 2013 with its cloud connectivity, regular updates, and personalization, and you get it on up to five PCs, which you can share between all of the people in your family. This isn’t just reasonable, it’s an incredible deal.

 

Discuss this Article 30

ModernDislocation
on Sep 17, 2012
"With Office 2013, Microsoft is embracing a brave new world of pricing and packaging, and its a win-win." But not the largest growing platforms and thus open themselves to risk of losing dominance.
ADRz
on Jan 23, 2013

This is a nasty and pernicious licensing scheme while pricing for purchasing Office 2013 has been hiked up. It may appear "cheap", but the software will become inoperable if the fee is not paid. However, if the user purchases the software, it will remain operable if he/she encounters financial difficulties in the future. I cannot see why you want to act as a Microsoft super sales person!!

realtestman
on Jan 29, 2013

I don't see what the problem is. You can either pay for it outright (like before) or pay subscription. The former works for ever (as before), the latter requires you to continuously pay.

Talking about "encounters financial difficulties" is nonsense, it's like every other single subscription model for every other product (like Netflix for example) - you stop paying your subscription ends, it's hardly a surprise. If you don't like it, pay for it outright!

DBSync
on Jan 25, 2013

Agreed.

yoshipod (not verified)
on Sep 17, 2012
From the Thurrott Dictionary. Lemming: Someone who buys a new product each year from Apple. Luddite: Someone who does not pay Microsoft each year for the same product. Why would most people want to pay MS $100 each year when they can own the product outright for $139? A student would save $260 over their 4 years at College by purchasing MS Office instead of paying for it on line each year. Hardly attractive. But I guess if you are Paul, whatever MS does is attractive. At least the Apple "Lemmings" get something brand new each year. What does the Office user get that is new, but a $100 fee? Office is a great tool, but this pricing is not good for most users.Our cheerleader is trying to convince you otherwise.
MSFT_Tinkering
on Jan 15, 2013

I guess you missed or dismissed the part about "multiple feature updates every year." Granted the extras like 60 min of Skype and 20 GB on SkyDrive aren't big incentives, but they are a nice garnish.

You also seemed to have glossed over the fact that the $100 lets you install it on 5 machines, so while your example of a stand alone college student is valid for that one person, should a family buy 5 physical copies at your $139 price? They'd have to use that version for over seven years to recoup the cost.

So you're right, this doesn't make sense for single folks, but makes perfect sense for families which IS the market they are targeting.

TheThinker
on Nov 27, 2012

The issue is whether Office 2013 will be software as a service or just software as a recurring charge. In order to be the former, Microsoft must offer some tangible continuing value for subscribers beyond simply the ability to continue to use the Office software.

The idea of rolling additional features sounds promising but Microsoft has a bad track record in this regard. What ever happened to those Windows Vista Ultimate Extras?

I'll believe it when I see it.

realtestman
on Jan 14, 2013

Somehow I don't think comparing Vista Ultimate Extras, by a different team for a different type of software more than 5 years ago, is the same as this situation.

Sven
on Dec 17, 2012

I am glad to see that some one else find the use of the word "luddite", in this context., rather odd, to say the least, and definitely inappropriate.

spaul41
on Jan 4, 2013

For yoshipod - You say $139 a year which is correct for the student version. If you want Outlook, Publisher, or Access, you have to buy the full version which is $399 for a SINGLE user. Not a good deal!

gruntboy50
on Jan 4, 2013

I think the only real attractive aspect of the Office subscription is the licensing on multiple PCs and the cloud privileges. When you factor in that Office is typically released every 3-4 years. $99 quickly gets you to the $299-399 cost for the full blown single seat.

I think in many ways if you can acquire office through the Home Use Program (HUP) then you would be better served to own the single seat.

Its not a great deal, Its just a way of financing that $399 seat with a few perks.

Not something to get real excited about. Bundle Xbox Live or lower the price to 50 bucks a year then it becomes more attractive.

The wild card is determining how valuable the mobile services will be and if its worth the asking price. I still think the home user is best served with a free/opensource alternative....If cost is your sensitivity.

pthurrott
on Jan 4, 2013

Actually, it is a great deal. That 3-4 year upgrade cycle you reference is obsolete with Office 2013, which will be updated regularly going forward.

MMSMD
on Jan 4, 2013

I am impressed with the pricing because I would love to have this package on more than one machine at $100 a year. I would have saved a lot. It is unclear how the performance will be because I use Access regularly and have several large database I maintain and edit. I think it will be worth a one year subscription to find out. If the performance is like a netbook, back to the traditional packages.

wedgeski
on Jan 7, 2013

I'm in at the $99 price-point, but would like to see the benefits extend dramatically over the next few years. If Microsoft is serious about SAAS then this should only be the start.

davebarnes
on Jan 11, 2013

I have Office 2011.
I think that I will stay with that.

SamR
on Jan 11, 2013

The pricing is reasonable but it would be nice if Microsoft offered a low end package with just Excel and Word. A price leader to entice people to join the Office system.

Or even better Excel and Word separately. Similar to Apple's Numbers and Pages. That would work well with a future iPad App release.

realtestman
on Jan 14, 2013

They do offer Excel and Word separately and have done for decades.

Victek
on Jan 24, 2013

Along these lines Microsoft has been offering Office Starter Edition - just Word and Excel - for free (well, ad supported). Has that been discontinued?

pthurrott
on Jan 24, 2013

Yes, that is discontinued. The free PC bundle going forward will be a trial version of Office 365 Home Premium, which will include 5 licenses for Office 2013.

shehaal
on Jan 13, 2013

@SamR You can purchase individual products like Word or Excel - of course, you pay a premium for the privilege. Just look at Project or Visio as examples there..

Harry_Wild
on Jan 18, 2013

How about pricing on Office 2013 Professional Upgrade to upgrade from 2010?

bobc1215
on Jan 18, 2013

Although I see the logic in some cases you have to realize there are some of us out here that can stick with the same version of office for those 7 years. I only need 3 licenses and I just bought 2010 for 3 computers with a free upgrade to 2013 for $90 at Best Buy last month. That comes to just $12 a year for the next 7 years. Hard for me to stomach the subscription model.

pthurrott
on Jan 18, 2013

The normal retail products are still being offered. So you do have the choice.

trivorly
on Jan 19, 2013

This reminds of the new shared plans for ATT and Verizon. They MAY be good if you have lots of phones/devices (tablets, mifis, etc) BUT if there is only one or two of you then it is a horrible deal. There is nothing compelling in Office 2013 that requires me to upgrade from Office 2007. I have enough issues with paying $48 for XBox Live (yes, thanks for making it very clear you're not a supporter of this either) without adding a $100 a year for office. Most people use less than 1% of Office Features and only use Office for 100% compatibility - don't need the latest/greatest.

MistyMuffinDonut
on Jan 20, 2013

I think what MS are offering is a great deal. I think the subscription service for me would just end up being cheaper for me and my family in the long run.

Craig-CT
on Jan 24, 2013

Whether or not the subscription is a good value depends a lot on how many PC's you have, and how many components of the suite you need.

I'm in a 2 PC household, and only use Word, Excel, and OneNote. So for me, the Home and Student version (family pack) has been a good value. With 2 PC's, 3 year upgrade cycle, and $150 list, it comes out to $25/PC/year.

I'd be interested in the subscription option for convenience, but not at double the cost.

I wish they offered the option of per user pricing, perhaps scaled to the number of components used, and maybe with multiple copy discounts. Since it is all handled by computer anyway, can't imagine it would be that hard to manage.

Someone must have decided that they could make more money forcing the users to choose between full purchase or a family license. I wonder if they couldn't make up in volume what they lost in price with a more flexible pricing scheme.

studio4llc
on Jan 24, 2013

Get used to it. Autodesk and Adobe have been forcing users to their subscription services for some time by virtue of increasing the cost of a single product, or a suite of products, to the point their subscription rates are more justifiable. Both add more software plus cloud storage to their suites to help ease the pain and, upon prior approval, will allow the software to be installed on a second machine (but not to be used simultaneously).

Microsoft is a bit late to the game, perhaps because users don’t need to upgrade their Microsoft Office software as often. I use MS Office so little that 2010 could suffice for the foreseeable future. But @ $100 per year and cloud integration, it seems to be a no brainer to me. And I suppose I could let my grandchildren use a couple of the copies?

With my Autodesk and Adobe subscriptions (30+ programs/$1,000 annual fee for Autodesk and 23+ programs/$600 annual fee for Adobe), coupled with MS Office 2010, I added a 2tb second hdd last week for data/content and use my 1tb primary hdd only for windows and programs.

lrnr94
on Feb 4, 2013

Paul, is the pricing you quoted for the Office 365 Small Business edition valid still? I cannot find that offering on their website.

lrnr94
on Feb 4, 2013

After reading the Office 365 (Plan P1) Service Description and chatting with s a sales person, it appears I have to purchase a full, local copy of Office and then the Office 365 subscription adds to/works on top of that. That does not sound like a deal for $149.99 /year for a small business just looking for the Office applications. Could be a decent deal if you are looking for AD and email for a small business.

Mark532011
on Feb 24, 2013

So lets say you are a typical small business with 10 employees and 7 computers and strapped for cash.

To use Office 365 Small Business you would would need to need to license:
10 @ $149.99/year = $1,499/year

But wait, that only covers 5 computers. So you have to tell your employees which computers they are "allowed" to use and which ones they can't or to be legal you would most likely have to double the licenses.
20 @ $149.99/year = $2,999/year

Purchasing Office Home and Business 2013 would cost:
7 @ $219.99 = $1539 (one time cost)

hmmm, you are right... seems like a no-brainer to me

As a separate issue, Office 365 and 2013 requires Windows7 or 8. I am sure there are a lot that have already have that, but every small business I know would have to upgrade some or most of their computers

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