Last week, Microsoft launched Office 365 Home Premium subscription service, the version of its cloud service aimed at home users of the company's Office suite of applications. Subscribers will get the new Microsoft Office 2013 versions of Access, Excel, OneNote, Outlook, PowerPoint, Publisher, and Word. What got somewhat lost in the shuffle of this launch was that Office 2013 was also released for purchase in the traditional software model. I'm sure that's no mistake, as Microsoft transitions to a "devices and services" company.
Microsoft also announced that the business versions of Office 365 would launch with new capabilities on February 27, which is probably the bigger news for IT pros. However, the company created some hoopla around the launch of the consumer-focused Office 365 Home Premium with an event in New York at Bryant Park where visitors were able try features of the new releases, including Skype world calling -- which you won't get in the retail version of Office. In all of Microsoft's signage and press material surrounding the launch, the subscription model is highlighted and the straight software for purchase looks like an afterthought.
This strategy makes sense for at least a couple of reasons. Obviously, Microsoft has recognized the changing computing habits of users. People want access to their documents and applications from wherever they are and on any device -- PC, laptop, tablet, or smartphone. Office 365 has the potential to fulfill this promise. The Home Premium edition lets you install Office 2013 applications on up to five devices, including tablets and Apple Macs (providing they meet certain minimum requirements, of course). And if you're using a computer that doesn't have Office installed, you can stream Office applications with the new Office on Demand feature. Meanwhile, if you buy Office 2013 software, you get to install it on one device.
Another good reason for Microsoft to focus on the subscription model is that it creates a steady flow of income for the company. It's a better business model for long-term sustainability than releasing new versions of the same products and expecting users to buy them each time. The benefit to consumers -- at least in theory -- is that they will receive updates and new features more quickly and regularly. Part of Microsoft's message is that new features will appear first in the cloud service in the future and only later be made part of a software update for traditional purchase.
For consumers, and for businesses, who are used to buying software, installing it locally, and upgrading at regular intervals, this transition might require a bit of a mental shift. We are perhaps conditioned toward purchase rather than renting; after all, most people aspire to own their own home. At least part of the reason for home ownership is that real property typically gains in value, thus making it a worthwhile investment.
Software, on the other hand, is more like buying a new car that loses value the moment you drive it off the lot and continues to decline the longer you hold on to it. By the time you're ready to purchase a car again, several generations of new vehicles will have come and gone, with new features that just might make obsolete what you already have. That doesn't mean that what you purchased doesn't still work for what you bought it for; it just might not stand up in the new world that has risen during that time.
Sound familiar? That's where Microsoft is heading with this whole devices and services notion and focusing on launches such as Office 365 Home Premium. Another benefit the company might have in mind by leading with the consumer version is the possibility of taking advantage of the consumerization of IT. We already see the effects of this trend in mobile devices, with IT departments being required to support a variety of smartphones and tablets because their users have made the case that such devices -- initially purchased for personal use -- will be a productivity aid for work. Is it such a stretch that end users might also find the same benefits in cloud computing if they get used to using Office 365 on their own?
Most businesses by this point are already investigating the cloud, if not using cloud computing for various workloads, so it's not like companies need a big nudge to get moving in this direction. Nonetheless, having a user base that's already familiar with the benefits and understands what's involved can certainly make things a lot easier if your business is making a switch to the cloud. Microsoft's big launch is a great step in bringing the cloud to the masses.