In-Depth

What We Know About Office 2013 So Far

Ahead of Microsoft Office 2013's release, Microsoft is touting some redesigned features and a new pricing system.

• By Kurt Mackie
• 01/22/2013

The "next" Microsoft Office will arrive for sale to the general public sometime in the first quarter of this year, according to Microsoft's estimate, but much is already known.

For instance, Microsoft's volume licensing customers already have access to the next Office as some of the products were made available to them in late October. In addition, Microsoft's pricing details for volume licensing customers were released in December. There's a clunky way to access those prices via the Microsoft License Advisor portal here, but not all of the products (which are known as "SKUs") are available yet.

As an indication that there's more to come about the new Office SKUs, veteran Microsoft reporter Mary Jo Foley got her hands on some partner information that describes a few more details, including an as-yet-undescribed "Office 365 Midsize Business" product (see chart).

[Click on image for larger view.]

Microsoft's Office 365 and Office 2013 pricing.

Foley also thinks that the new Office products will become broadly available to the general public by the end of this month, on January 29, instead of later in the first quarter. While Office 365 Midsize Business appears to be new in terms of what Microsoft has publicly announced so far, it's apparently not so new to Microsoft's partners and analyst insiders, and it's not quite available.

"Microsoft had announced some of the Office 365 SKUs a few months back (such as 'Office 365 Midsize Business'), along with monthly subscription prices. But these services haven't been officially launched yet," observed Rob Horwitz, research chair at the Directions on Microsoft consultancy, in an e-mail.

Microsoft has been using the phrase, "Office Next," to describe the newest version of its productivity suite emerging this year, but it's otherwise conceived as either "Office 365" or "Office 2013" when it comes to purchasing the licensing. More specifically, what that means is that Office licensing will be sold either with Microsoft's online services portal branding, called "Office 365," or it will be sold in the traditional perpetual license form as various "Office 2013" editions.

Perpetual Licensing vs. Subscriptions
With perpetual licensing, an organization buying the Office license can use the product in perpetuity, but it's licensed per device. Office 365 subscribers, in contrast, pay a recurring monthly fee to use Office, and the licensing is per user, with permission to run Office on up to five devices. However, if an organization stops paying that monthly fee, then it will lose all rights to use Office, unlike perpetual licensees.

Another difference between the two types of Office licenses pertains to remote use rights. A perpetual license grants the installation of Office on a server and allows remote access to Office via Microsoft's Remote Desktop Services or virtual desktop infrastructure configurations, or there are roaming use rights permitted under Software Assurance. In contrast, subscription-based Office 365 can only be installed on a desktop and no roaming rights are permitted, but that's compensated by the fact that users are permitted to run up to five copies of Office anywhere, even outside the organization.

Organizations wanting to leverage downgrade rights are out of luck with Office 365 as those rights don't exist. Only perpetual licensees of Office have such downgrade rights. These and other mind-twisting contemplations for IT pros are summarized in this Microsoft licensing brief (PDF) for Office Professional Plus for Office 365.

All of these Office SKU considerations can become confusing as Microsoft uses similar product names for products with different licensing. For example, Office Professional Plus for Office 365 is subscription-based licensing, but Office Professional Plus 2013 is perpetual-based licensing.

Office 365 pricing details for consumers and small businesses were described by Microsoft in September in this blog post. Here are those details, plus a few more, as summarized by a Microsoft spokesperson:

• "Office 365 Home Premium, a single subscription for up to 5 users, will be available in both physical and online stores across 227 markets worldwide for $8.33 per month ($99.99 billed annually). A free 30 day trial will also be available online.
• "Office 365 Small Business Premium will be available in both physical and online stores, including small business resellers, across 86 markets worldwide for $12.50 per user per month ($149.99 billed annually). A free 30 day trial will also be available online.
• "Office 365 University is priced at US$1.67 per month, it's a great deal. (Estimated retail price of US$79.99 for a four-year subscription; non-U.S. pricing available.)"

Note that the last price listed by the Microsoft spokesperson for Office 365 University at $1.67 per month is less than what's listed in the partner chart found by Foley at $3.30 per month, so Microsoft appears to be still working out some pricing details.

Office Not in the Cloud Yet
Another misconception with the Office Next editions offered through Microsoft's Office 365 branding is the affiliation with Microsoft's Online Services products. Even though people might assume that the Office subscribed to via Microsoft's cloud-based Office 365 service would be cloud based and cloud delivered, that's still not quite the case. It's still a product that gets installed on the customer's premises, rather than served up from Microsoft's servers.

Microsoft has one hybrid exception, which is called "Office on Demand." This version of Office, which is available with some Office 365 subscriptions, uses Microsoft's "click-2-run" streaming technology to deliver a temporary copy of Office to any PC. At the end of the Office session, most of the bits delivered by Office on Demand get deleted. So, while Office does technically stream to a desktop via Microsoft's servers with Office on Demand, the product is still installed on a local machine. 

For those loving the concept of Office accessed anywhere through a browser, Microsoft offers Office Web Apps (OWA) through some of its Office 365 subscription plans. The use of OWA in organizations used to require the use of SharePoint, but Microsoft announced late last year that its new OWA product for organizations is now called "Office Web Apps Server." For enterprise users, Office Web Apps Server is now deemed to be a separate product from SharePoint

Office 365 Perks
In general, Microsoft is aiming to steer its customers more toward the monthly subscription-based Office 365 model, rather than traditional perpetual licensing. The upfront costs for Office 365 licenses are lower than for a perpetual license. Moreover, Microsoft is promising that Office 365 users will get continuous product upgrades throughout the lifespan of their subscriptions, as well as some cloud-based benefits that perpetual licensees won't get.

Those cloud-based perks for Office 365 subscribers vary, depending on the edition that's licensed. Microsoft announced five Office 365 editions in July, including an Office for Mac option, which can be used instead of the Windows-based Office.

"When the new Office launches, we'll deliver an update to Office for Mac 2011," a Microsoft spokesperson explained. "With this update, Office for Mac licenses can count as part of your Office 365 Home Premium subscription." 

The perks associated with the various Office 365 offerings can make the decision on how to buy the next Office somewhat complex. For example, Office 365 Small Business Premium customers can install Office on up to five PCs or Macs, and possibly some smartphones, per user. They have access to Office on Demand. They can share calendars and get a 25 GB mailbox. Videoconferencing for online meetings is possible, and they can create Websites for the organization and share documents over the Internet. Those capabilities aren't included with traditional perpetual licenses of Office. For more about those sorts of contrasts, see this Microsoft-produced table (Word doc).

In addition, organizations subscribing to Office 365 will gain commercial use rights for Office Home and Student 2013 RT when that program is used on a companion device at work, according to Microsoft's Product Use Rights. Office Home and Student 2013 RT is loaded on tablet machines running Windows RT, such as Microsoft's Surface RT tablet, at no added cost. However, Office Home and Student 2013 RT lacks some of the upper-end suite features, such as macro and add-on support.

The decision to pay $499 for a perpetual license of Office Professional Plus 2013 or to buy subscription-based Office 365 Enterprise for $20 per user per month possibly depends on how long organizations hold onto Office. It can be a tough decision for the budget strapped. For instance, organizations have held onto Office 2003 for almost a decade. According to an estimate by Gartner, Office 2003 is thought to have just started to lose ground to newer Office editions starting last year.

One good piece of news for organizations buying Office Next is that costs of perpetual licenses didn't substantially increase compared with the current Office 2010 product offering.

"The business prices for Office 2013 perpetual licenses were published in December -- [and they are] basically stable vs. Office 2010," commented Horwitz. "And the bits have been in volume licensing customer's hands for a few months now (since Oct. I believe)."