Microsoft just announced a new plan to offer the Office 2013 software suite to home and small business users via the new Office 365 monthly pricing model. The theme of which is a new one size fits your whole family styled message (see image below).
The home edition comes with the standard Office Professional Applications (Word, PowerPoint, etc.), as well as a license to use Office on demand from anwhere, 20 GB of Skydrive storage space, and rights to install the instance on up to 5 devices. The biggest point of note in all of this, currently it appears Microsoft is going to be licensing this on a per household basis and NOT a per user basis.
This is a significant change for Microsoft as they stand to lose a large chunk of money from the traditional middle class households who typically buy several copies of the software across multiple licenses. On the flip side, the new model should make pirating significantly more difficult and encourage more low income families to equip their home devices.
Only time will tell whether this nets out in their favor…
Another interesting implication here is the relationships with Dell and other PC makers (who typically bundle in the software OEM style). Now consumers may have more reason to fight back against OEM bundling which is often forced into the price of a PC or Laptop. If I were Dell, I know I wouldn’t be happy with yesterday’s announcement.
This new model is just another example of the company’s shift toward SaaS based pricing models (Software as a Service). Subscribers will have access to the same full range of products as well as others, all integrated to work more smoothly in conjunction with each other and the cloud. That includes Word, Excel, PowerPoint, OneNote, Access, Publisher, and Outlook. That includes Skydrive integration and rights to use 20 GB of storage. That includes 60 minutes of Skype world calling each month. That includes Office on demand (Aka Office Web Apps, the less popular term that confuses people appears to be getting abandoned here).
Considering the price tag is $99/year for the whole household on all devices, that is a damn good deal compared to before. So what isn’t included?
Microsoft is releasing a Office 365 Small Business version as well (not to be confused with the P1 plan). This new Office 365 Small Business plan will include all of the above except for SkyDrive and Skype. But it will ADD Lync Online, InfoPath, SharePoint, and Exchange (they are calling this “business E-mail”, but really, it is the Exchange Online offering that is already out there).
Appears to be a solid offering, although I’d have some questions. For example, based on the current P1 plan not having tech support included, my guess is this one wouldn’t either. Making it significantly less viable for small businesses who don’t have an experienced consultant working with them.
It is also worth clarifying that the Small Business option will be licensed per user (not per household). As it will be selling for $149/year, it is really in a whole different ballpark pricing wise, but still isn’t a bad deal by any stretch of the mind. Currently the stand-alone Office Pro Plus Offering for Office 365 is $12/user/month and only includes Office. With this news, it appears small businesses will be able to add in a variety of other applications more or less free (for roughly 50 cents more per month).
All and all an interesting announcement from Microsoft, note that none of these offering are currently available at this time, I’ll keep you posted when they are.