Microsoft tries to sell home Office users on subscription pricing

Updated Microsoft has unveiled its first attempt to seduce consumers into paying subscription pricing for its Office 365 package.

For $99.99 a year, buyers get the Office 365 Home Premium, which gives them a license to use Word, Excel, PowerPoint, OneNote, Outlook, Publisher, and Access applications on five computers in the home. Subscribers also get 20GB of space on Microsoft's SkyDrive cloud storage system and 60 minutes worth of free Skype calls per month.

"Today's launch of Office 365 Home Premium marks the next big step in Microsoft's transformation to a devices and services business," said Steve Ballmer, in a canned statement. "This is so much more than just another release of Office. This is Office reinvented as a consumer cloud service with all the full-featured Office applications people know and love, together with impressive new cloud and social benefits."

Redmond has also included a version of the Office subscription plan for students at a much cheaper four-year price of $79.99 – although given the staggering costs of higher education these days, those savings are needed. The business version of the latest Office 365 code will be released on February 27, the company said.

Meanwhile, Mac users aren't being left out: Office for Mac 2011 has an activation for the Office 365 service. But as for the standalone software, you'll have to wait a while. "The new Office for Mac typically ships 12 months after the new Office for Windows," Microsoft told The Reg in an email, "and subscribers will automatically get the new apps when available."

The move to subscription pricing is a major step for Microsoft, and while the company will still produce a standard boxed version of its code, Redmond is touting the cloud as the way to get all the latest and greatest features. Ballmer & Co. promise the software will be updated regularly with new features – users of the boring old non-cloud software will have to wait much longer for such upgrades.

That said, at least buyers won't have to worry about missing a payment. If the Office 365 subscription lapses, users will get a warning from Microsoft. If no payment is forthcoming, they will only be able to access their documents in read-only mode or via a printer, a spokesman told El Reg.

For those who just want to own a copy of Office, Microsoft also released a straight download of Office Home and Student 2013 for $139.99, Office Home and Business 2013 for $219.99 and Office Professional 2013 for $399.99. But it's clear the main focus of Redmond's attention is to get people subscribing to, rather than buying, software, and it's not hard to see why.

It's a source of not inconsiderable annoyance to many at Microsoft that home users typically buy one version of Office and then never upgrade it. After all, if all you want to do is write documents, do a very occasional PowerPoint presentation, or read an Excel spreadsheet from work, you really don't need the latest all-singing, all-dancing version of Office.

But that doesn't help Redmond's bottom line, so the company hopes to woo home users to subscribe based on the ability to share Office documents between multiple devices and get availability to them over the internet. Whether consumers will actually buy the package remains to be seen. ®

Update

Microsoft has released the pricing for the new Office 365 package in the UK and Europe, and it's a traditional tale – guess who's going to pay a little bit more?

US users pay $99.99 a year for Office 365 Home Premium, which at the current exchange rates would translate into £63.50 or €74.15, but instead will pay £79.99 or €99 respectively. The $139.99 price tag for Office Home and Student edition currently translates to £89.90 or €103.82, but Redmond rounds this up to £109.99 and €139,00, with the $219.99 Office Home and Business build selling for £219.99 and €269 rather than £139.70 and €163.15 that a straight conversion would allow.

The biggest financial losers are those who purchase the Office Professional package. The $399.99 price tag converts to £254.1 or €296.64 at current rates, but the British will pay £389.99 and European counterparts get stung for €539.

It's not hard to see why open source office suites such as OpenOffice, and latterly LibreOffice, are proving so popular in Europe at the moment. US companies like Microsoft and Apple traditionally cite the higher costs of doing business across the pond as the reason for the price differential, but it's difficult to see how such high margins can be justified – in this hack's opinion, at least.