Beware of ‘experts’ to toe the Microsoft party line on Office 365 vs. Office 2013.
We continue to be amazed at some of the comparisons by ‘experts’ between Office 365 annual rental prices and buying Office 2013 as a one-off payment.
Microsoft has deliberately made it hard to do ‘side-by-side’ comparisons. That’s no excuse for thoughtless calculations that are done by people who seem to have swallowed the Redmond marketing hype without question.
We’re not going to ‘name names’ or even ‘link links’ because we don’t believe in personal attacks and we’re just as prone to mistakes as anyone else.
If you’re to decide between renting or buying Microsoft Office, watch out for these comparison traps …
Rental price stays the same
There’s NO guarantee that the future price of an Office 365 subscription will be the same as it is now. Despite that, many calculations for Office 365 subscription/rental cost over time make that implied assumption.
Comparing retail prices not street prices
One way to make an Office 365 annual fee look better is to compare it with the official price of Office software rather than what you’re likely to pay. A typical calculation is:
- assume $100 a year for Office 365 Home Premium
- $400 once for Office 2013 Professional.
Office 365 Home Premium goes for about US$100 a year. There’s some discounts available for the first years rental (e.g. Amazon US is offering it for $69 at present) but after that you’ll pay Microsoft direct with no discounts in sight.
But anyone who pays the full $400 price for Office 2013 Professional is crazy. You can get the same software for around $250 at present, certainly under $300.
A more realistic comparison is between:
- $100 a year (maybe) less whatever discount you can get for the first year on Office 365 Home Premium
- About $250 once for Office 2013 Professional
Comparing Home ‘subscription’ and Professional
Even that comparison (Home rental vs buying Professional) isn’t accurate.
Office 365 Home (Home Premium) offers a year’s use of many Office programs. For Windows users there are 7 programs (Word, Excel, PowerPoint, Outlook, Access and Publisher).
The most direct product comparison is the, relatively expensive, Office 2013 Professional bundle that includes all those programs.
But most people don’t want or need all those programs. People mostly use Word and Outlook then Excel and/or PowerPoint. Only more specialized users need Access or Publisher. OneNote is a mixed bag of usage, if at all.
For most people the better comparison is between Office 365 Home rental and whichever Office 2013 bundle has the programs you use:
- Word, Excel, PowerPoint and OneNote
- Office 2013 Home and Student
- Street price $115, officially $140
- Office 2013 Home and Student
- Outlook plus Word, Excel, PowerPoint and OneNote
- Office 2013 Home and Business
- Street price $175, officially $220
- Office 2013 Home and Business
At street prices, the Home and Business pack (which includes Outlook) costs about 1.5 years of a Home (Home Premium) annual rental or 3 years of an Office 365 Personal plan.
Buying Office means it will become ‘obsolete’
This one is totally buying into Microsoft’s marketing hype and goes like this:
“… with the next release of Office, money spent on an Office 2013 package will be obsolete“
Obsolete? Don’t think so. Any version of Office is good for at least 4 years (when Microsoft stops mainstream support) and really 9 years (when extended support expires) and beyond.
Not everyone jumps to a new version of Office. Aside from the costs of switching, in most cases the existing version of Office has more than people need so there’s no point in paying more. Sticking to an Office version also reduces compatibility issues with VBA code and add-ons.
Microsoft is pushing annual rental pricing because people and organizations are NOT paying for each new Office software. It’s getting harder and harder to convince people to pay another few hundred dollars for Office every 2-3 years. With an annual rental fee, Microsoft is getting money from you all the time you’re using Office.
It’s a rental not a subscription
Yes, we’re a lone voice on this but truly – an Office 365 annual price is software RENTAL. You’re paying for the right to use something for a period of time, not receive an item (like a magazine) over the same period.
You would not talk about a ‘car subscription’ or a ‘home subscription’ but Microsoft has convinced people to talk about a ‘software subscription’. It sounds better in marketing terms because, psychologically, people don’t like ‘renting’ but are OK with a ‘subscription’. So Microsoft has unilaterally redefined a word to suit themselves.
The plus side
Office 365 rental packages have their advantages. The ability to switch or mix Office for Windows and Mac is a major boon for some people. The Home (Home Premium) plan has 5 software licences for different computers. Access to Office Mobile apps for phone and tablets may be good, when and if those apps become decent and stable (at present they are almost useless). The ability to spread payments over time will also suit many organizations and individuals.
Benefits like Skype minutes, OneDrive storage and even the wide range of programs now available with Home Premium/Home or Personal packages can change in the future.
Unlike buying Office software, the price, benefits and rules of Office 365 can, and will, change over time.
An Office 365 annual rental might suit you, but it’s not a simple choice. Once you’ve chosen to rent Office, it can be hard to switch back to one-off purchases of the software.
Let’s not fool ourselves. Microsoft isn’t introducing Office software rental out of the goodness of their hearts. They know it’s hard to convince people to pay monthly or annually so they are making the initial offer very enticing. It’s a shame to see simplistic analysis not looking beyond the marketing hype.
- Google Hangouts in Outlook
- Office 365 Personal arrives
- Office for iPhone and Android now free for home use
- Sharing an Office 365 rental cost
- Office 365 gets Personal
- Another view on Office 365 subscriptions
- Why renew Office 365?
- Office 365 licence changes