Office reaches ‘subscription’ milestone

The latest Microsoft financial results mark an important milestone in the way we pay them for Office software.

“For the first time, Office 365 Commercial revenue surpassed revenue from our traditional licensing business.”  – Amy Hood, Microsoft CFO.

More cloud money

MSFT got more money from Office ‘subscriptions’ than from one-time ‘perpetual’ and other traditional licensing.

‘Subscription’ is a euphemism that Microsoft has successfully used to make the annual payments more palatable.

Tim Worstall in Forbes magazine makes a good point about this change.  Software was a capital investment but now it’s a monthly or annual expense.

That influences how Gross Domestic Product is calculated and also how software purchases are accounted for in organizations large and small.

For most of us, it means we pay Microsoft regularly.  Microsoft gets more money and a more regular cash flow, which were the major aims of the change to ‘subscriptions’ in the first place.

There are ways to save yourself money on Office 365 either new or renewal.

Cloud computing means they meld software and cloud services in a way that makes it harder than ever for customers to move away from Microsoft Office.

The results for the quarter ended 30 June 2017:

  • Office 365 consumer subscribers increased to 27 million
  • Office consumer products and cloud services revenue increased 13%
  • Office commercial products and cloud services revenue increased 5%
  • Office 365 commercial revenue growth of 43%

 

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