Office 2013 vs Office 365: Should you buy or subscribe?

Pirated or legal, the vast majority of us use Microsoft Office. It’s impossible to imagine computers without Word, Excel and PowerPoint and very few people are fully satisfied with the alternatives that have appeared over the years. One huge reason for that is piracy—since the very first Windows PCs appeared in Indian homes and offices, Office has been passed around freely from assemblers to customers and friends to friends. It has become such a fundamentally important part of using a computer that people are still often surprised or outraged to hear that it has to be purchased separately.

Even though the compulsory activation has become tougher to sidestep and people have grown aware that piracy isn’t entirely legal, the sheer demand for Office has kept illicit copies in circulation. Reducing prices doesn’t seem to have helped very much. Now, Microsoft wants us to pay a monthly or annual subscription to maximize the number users from whom it can collect money. This isn’t the first or most ambitious attempt at converting software purchases into subscriptions—Adobe’s Creative Cloud springs to mind—but rather than being an option for those who want it, Office 365 is set to become the preferred way of buying and using Office. For many home users, this will be the first experience of Software as a Service (SaaS).

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Retail packages appear to make more sense for most customers

The differences between Office 2013 and Office 365 aren’t very clear at first glance. 365 is the name of the subscription service which gives you access to the most recent version of the Office programs on up to five devices, which now means Office 2013. A subscription will add 20 extra gigabytes to your SkyDrive account and get you 60 free minutes of Skype calling per month. You can download and run a small temporary instance of any Office program on someone else’s computer any time you need it. If for any reason you cancel the subscription or fail to pay, the programs will fall back to a “reduced functionality mode” which lets you open and print documents, but not much else. If you want to pay per month, your credit card will be billed automatically. This precludes the option of using the programs on demand when you actually need them, which would be nice for those with occasional usage patterns.

Beyond that, the software is identical. Office programs purchased outright will still ask you to tie yourself to a Microsoft account and will still use SkyDrive as the default save location for all files.  There’s no cool “on demand” Office, but you still have the highly functional Web apps via office.com and SkyDrive. The main advantage is that once you pay for it, it’s yours to keep. For better or worse, that privilege will cost you quite a bit. Here’s a quick comparison of the costs and features of subscribing to Office 365 and buying Office 2013 outright.

Right at the outset, it’s clear that the cost of Office 365 will exceed that of a retail package in the second year. If you consider the fact that Office 2010 Home & Student is still selling for Rs 3,999 and anyone who buys it before April 30 this year is eligible for a free upgrade to 2013, even one year’s worth of Office 365 seems excessively expensive. Of course the value equation changes as you go up the pricing chart: Office 2013 Home & Business adds Outlook and costs Rs 13,499 which pushes the break-even point to just over three years.

Here’s what Microsoft has to offer though: you get to use 365 on five devices, which can include any mix of PCs and Macs. Presumably, iOS and Android devices will be added to this if and when Office apps for these platforms ever launch. If you do actually use all five licenses, 365 will make more sense for you over time—it will be six and a half years before you match the cost of five outright purchases. Then there’s the fact that you get only Word, Excel, PowerPoint and OneNote with the base retail package, but 365 also includes Outlook, Access and Publisher. While Outlook is probably the most useful of the bunch, home users and students who are the primary audience here are unlikely to require its functions, and no matter how good Publisher and Access are, they’re not exactly in high demand.

The outright purchase simply makes better financial sense—and that’s not even taking into account the very attractive prospect of saving Rs 1,500 by buying Office 2010 and upgrading. (There isn’t much reason to upgrade from 2010 to 2013 on the whole, but if you really want to, buying another copy solely for the upgrade will work out 28 percent cheaper.)

As things stand right now, the subscription option isn’t more attractive for the average home user with a single PC or laptop. No matter how much Microsoft would like to tie us into monthly or yearly commitments, there’s just no way to justify that kind of outlay. It only works in the very unlikely scenario that you have five computers on which you need all the full-fledged Office programs.  The company should think very seriously about creating a tier of 365 without Outlook, Access and Publisher priced at half or a third of what the Home Premium offering costs. Microsoft has missed the opportunity to appeal to the huge number of people who pirate Office right now but would consider paying a small amount.