Should You Subscribe to Microsoft Office 365?

One of the biggest new twists in Office 2013 involves how you might end up paying for it. Here's how to do the math on Microsoft's new Office subscription plan.

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Yesterday, Microsoft formally launched the consumer version of its Office 2013 suite, which it first revealed last July. As usual with a new version of Office, there are little tweaks all over the place, many of which have to do with making the software more webby (you can easily save documents to SkyDrive online storage, so they’re available from any computer, phone or tablet) and touch-friendly (the interface has been slightly rejiggered to work better with touchscreen PCs, such as many Windows 8 machines).

But one of the biggest new twists in Office 2013 involves how you might end up paying for it. Microsoft is now offering a consumer version of its Office 365 service, which turns the suite from a shrinkwrapped product you pay for in one lump sum into a subscription service. And as you’ll see if you visit, it’s emphasizing this new Office-as-a-service over the conventional versions. (They remain available, although Microsoft has done away with previous versions that entitled you to install the suite on more than one computer.) It wants subscription Office to be the default Office.

Software companies certainly like the idea of turning their wares into services with ongoing fees: It’s a way of ensuring that customers don’t buy something once and then hold onto it, spurning upgrades indefinitely. (There are people who paid for Windows XP back in 2001 and have never given Microsoft another dime.)

But do you want to subscribe to Office? There’s no one-size-fits-all answer to that question, but I’m going to try to point you in the right direction.

One question I’m not going to answer in this piece. though it deserves further examination: Do you need Office at all, given that the consumer versions of Google’s equivalent web-based apps are free? (Briefly, Google’s services are a workable alternative in a lot of cases, but Office is still a vastly richer, more capable collection of productivity software.)

With the new consumer version of Office 365, Microsoft has resisted its usual instinctive urge to offer a product in a multiplicity of versions that vary in subtle ways. Despite its name — Office 365 Home Premium — there’s just one version of Office 365 for home users. It costs either $99.99 a year or $9.99 a month, which covers up to five computers in a household. They can include Windows PCs and/or Macs; Microsoft isn’t releasing a new OS X version of Office just now, but Office 2011, the current Mac version, is part of the package.

Your money gets you…well, pretty much everything in Office you’re likely to want to use for personal stuff:

  • All the major Office apps (which, for Windows, include Word, Excel, PowerPoint, Outlook, OneNote, Access, Publisher) in downloadable form, with access to upgrades as they become available;
  • 20GB of additional SkyDrive space, beyond the 7GB Microsoft offers for free;
  • Office on Demand, a service that lets you stream full-blown Office to Windows 7 and Windows 8 PCs that don’t have the suite installed;
  • An hour of Skype calls (to landlines) each month.

If you’re trying to do the math on the deal, start by considering how many computers you plan to use Office with:

  • For one PC, Office 365 is $100 per year
  • Two PCs: $50 per PC per year
  • Three PCs: $33 per PC year
  • Four PCs: $25 per PC per year
  • Five PCs: $20 per PC year

Then think about your particular situation:

“I have a bunch of computers and they all need Office.”

Office 365 delivers impressive bang for the buck. Even if you bought Office Home & Student — a basic version that includes fewer apps than Office 365 — paying for five copies of the the suite would cost you $700. You could use Office 365 on those five machines through 2019 for that price, and you’d be entitled to all the upgrades that came along. And if you bought five shrinkwrapped copies of Office Professional — the version most comparable to Office 365 Home Premium — you’d owe Microsoft $2,000, which is enough to pay for twenty years’ worth of Office 365.

“I want as much Office as possible.”

Until now, Microsoft has catered to price-conscious home users with stripped-down versions of Office. But Office 365 has Outlook, Publisher and Access. And depending on the number of PCs you have and your propensity to upgrade, it might still cost you less over time than a more basic shrinkwrapped edition.

“I want the latest features as fast as possible.”

The core of Office 365 is still a suite of great big conventional PC apps that require updating, not web-based services that always sport the newest features. But Microsoft says it’s going to release new stuff for Office 365 on an ongoing basis, giving subscribers additional capabilities without making them wait three years or so for a conventional upgrade.

“I’m upgrade-adverse.”

If you plan to buy Office and then run it into the ground, Office 365 and its free upgrades lose much of their appeal. Note, though, that you aren’t required to install new versions as they come along: You could stick with the old ones until you were ready to make the leap.

“You know, I basically need Word and Excel for one computer.”

A $139.99 copy of Office Home & Student will probably do you fine.

“I’m worried what will happen to my stuff if I stop subscribing.”

ZDNet’s Mary Jo Foley has written a good post on this topic. It’s true that you should only subscribe to Office 365 Home Premium if you’re comfortable with the idea of paying Microsoft $100 a year for productivity software indefinitely. But if you cancel your subscription, you won’t lose the documents you created — just access to the full-blown Office apps. You’ll still be able to open your files in a boxed copy of Office, Microsoft’s Office Web Apps or an Office-compatible competitor such as Google Docs.

The bottom line: Depending on how many PCs you’ve got and how many Office apps you need, Office 365 Home Premium is anywhere from a respectable deal to an aggressively excellent one. If you’re happy with whatever version of Office you’re using now — or happy using something that isn’t Office — there’s no need to feel guilty if you don’t feel like considering Microsoft’s latest upgrade right now. But I think a lot of people who are ready to move to Office 2013 are going to decide that Microsoft has made the Office 365 proposition irresistible.