Microsoft Office 2013, til Death does it Part

For years Microsoft touted that the initial cost of a product is far less important than the Total Cost of Ownership. So, let's examine the TCO of their new Office 2013 offering (keep reading for MAJOR warnings).

Microsoft now offers two ways of obtaining Office 2013. They offer a new subscription model and the normal one-time retail purchase. Subscriptions are paid yearly and the products work as long as you pay. You also get all upgrades to the next version of Office for free. Normal retail purchases can be made online or from stores and can be downloaded or provided on physical discs, just as they were for Office 2010. These retail product licenses are perpetual - you buy them one time at one price and keep them for good. The chart below gives some average prices of each offering.

Office 2013 Offerings

Product
Cost
# of Licenses
License Limitations
Upgrades
Office 365 Home Premium
$100.00/yr
5
Home Only
Free
Home and Student
$140.00
1
Home Only
None
Home and Business
$220.00
1
Home/Commercial
None
Professional
$400.00
1
Home/Commercial
None
Office 365 Plan E3
$20/mo
1
Home/Commercial
Free

From the chart you can see a single home PC owner can purchase Office Home and Student 2013 for $140 and will have a pretty good savings over the years, with the downside that they will have to purchase their next version again when the time comes. In a home where there are a couple PCs and a couple laptops, paying $100 per year for the subscription model seems like a steal. Alone, the information in the chart does not look outrageous. But, let's compare this to the offerings to Office 2010.

Office 2010 Offerings

Product
Cost
# of Licenses
License Limitations
Upgrades
Home and Student
$140.00
3
Home Only
None
Home and Business
$200.00
1
Home/Commercial
None
Professional
$350.00
1
Home/Commercial
None

We can see clearly that 3 licenses of Office Home and Student 2010 are much less expensive than the new 1 license of Office Home and Student 2013. Keep in mind that this is a perpetual license and not a yearly fee. Clearly, Microsoft is trying to encourage customers to move to the subscription model by decreasing the value of their perpetually licensed software.

The Big Warning

For many years, Microsoft has also offered another another license type - the OEM version. The OEM (Original Equipment Manufacturer) version was purchased along with the PC and preinstalled by the PC vendor. It was typically cheaper, but the OEM license was bound to that computer. If the PC was stolen, destroyed in an accident, or sold, the license went with it. You were not allowed to install it on another PC.

What most people don't realize is that Microsoft has made one major change to their new licensing - all perpetual licenses of Office 2013 are now bound to one PC. All previous retail versions of Office were allowed to be installed on one PC at a time, but you could move them if required. If the original PC was sold, stolen, or destroyed you were allowed to remove Office from it and install it on a new PC. Not any more! Now you must purchase a new copy of Office for each PC you buy.

So, those people purchasing a retail copy of Office 2013 for Windows XP will be in for a nasty surprise in April of 2014 when they need to replace their PC. At that time Microsoft is ceasing support for Windows XP and customers will try to put Office 2013 on their brand new PC and find that Microsoft refuses to allow it to be activated. They will be required to buy another copy of Office 2013. Over the years, others will be upset when their Windows Vista/7 PC or laptop dies or they replace it, only to find they need to buy another license of Office.

Free Office 2010 Upgrades

In October of 2012, Microsoft began a great offer. If you bought Office 2010, they would upgrade it for free to Office 2013 when it was released. But is this really a great deal? Perhaps millions of people bought a perpetual license of Office 2010 that could be moved from PC to PC. Now they are deciding whether they should take advantage of the Office 2013 upgrade. If they do, Office 2013 will be bound to their PC. For better and for worse, richer or poorer, in sickness or health, Office 2013 will be bound to that PC til death does it part.

A Final Word

This has by no means been a full explanation of all of Microsoft's Office license offerings. To go over them all would take a book. But hopefully I have made the buyer a little more aware.

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