Microsoft announces Office 2013 and 365 pricing, nudges users towards annual subscriptions

While we still don't know exactly when Microsoft will unleash Office 2013 and Office 365 upon the world, we do know how much they'll cost. While standalone versions, licensed for use on a single computer, will still be available, the new strategy makes it more affordable for many homes and business to opt for a subscription package instead. Office Home and Student 2013 (with Word, Excel, PowerPoint and OneNote) will cost $139, while Home and Business adds Outlook for $219, and the top of the line Professional package includes all of those along with Access and Publisher for $399. Compare those to the two Office 365 packages, which promise customizations that follow their users around, expanded cloud storage, access to all of the apps and automatically receive any future updates that come out for them.

Office 365 Home Premium will cost $99 per year, with 20GB of SkyDrive storage and 60 minutes of Skype calling per month and access on five computers, along with the ability to change out the devices at any time, and use "full featured apps" temporarily on any PC. It's a single subscription for up to 5 users, and will have a 30 day free trial available. Alternatively, small businesses with 1-10 employees could opt for Office 365 Small Business Premium that also comes with all the apps, but lets each user install it on up to 5 different PCs or Macs, along with 25GB Outlook storage, an organization-wide 10GB cloud drive plus 500MB for each user, online meetings and even website hosting. That also has a free trial, but costs $149 per user, per year. If you can't wait, buying Office 2010 or Office 2011 for Mac as of October 19th entitles users to a free upgrade to Office 2013 or one year of Office 365 free.

Clearly, Microsoft would prefer it if users took advantage of the new pay-per-year offerings, but what do you think? Check out all the details from Microsoft's blog and check list linked below (or our preview) as well as a few of their examples after the break, and let us know if you'll be upgrading or switching over to an alternative like Open Office.

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Family Example
The Jones family has a kitchen PC. Susan, the mother, has a Mac, and Jason, the father, has a PC and plans to get a new Windows 8 tablet. Their daughter has a PC for school. Historically, they've upgraded their devices and Office every 4 years, so we'll use a 4 year subscription window.

A subscription costs $399.96 for four years. By contrast, they would have to spend $699.95 to equip all five of their devices with Office Home and Student 2013. With a subscription, the Jones save $299.99, and they get the following additional benefits:
Outlook, Access and Publisher
Additional SkyDrive storage – a $40 value ($10/year for 4 years)
Skype credit – a $119.52 value ($29.88/year for 4 years)
Office on Demand, which allows subscribers to access the full, rich Office experience from any Internet-connected PC
New service updates and product upgrades

Device Lover Example
Rachel has a PC at work and a Mac at home and is getting a new Windows 8 Pro tablet. She uses them all for work, so needs Outlook on them all. Historically, she's upgraded her devices and Office at least every 4 years, so we'll again use a 4 year subscription window.

With a subscription, she'll pay $399.96 over four years. Equipping her three devices with Office Home and Business 2013 would cost $659.97. She saves $260.01 with a subscription and gets the following additional benefits:
Access and Publisher
Additional SkyDrive storage – a $40 value ($10/year for 4 years)
Skype credit – a $119.52 value ($29.88/year for 4 years)
Office on Demand, which allows subscribers to access the full, rich Office experience from any Internet-connected PC
New service updates and product upgrades

Traditional Example
David is retired and wants to downsize his life. He has one PC to keep track of his finances and stay connected with family and friends through email.

David usually upgrades his software every five or more years. Paying the subscription price over those five years would cost David $499.95. In contrast, with Office Home and Business 2013, he'll pay $219.99 to install Word, PowerPoint, OneNote, Excel and Outlook on his PC.

The traditional model won't provide David the ability to install Office on multiple devices, to use Office on any PC or to continuously upgrade to the newest versions, but it best fits the way he uses his computer and Office.