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Office 365 versus Office 2016 Plan versus Perpetual licensing

Microsoft Office 2013It is amazing to witness dramatic changes that have occurred in the software industry over the past five years. With the rise of active players such as Google and Facebook, the way we compute has changed significantly. Microsoft being the defacto standard for office productivity suites for nearly 25 years has been challenged by the dynamics of the Cloud and how software is acquired, delivered and used. The Office tools that Microsoft continues to charge for are free from Google, Apple, and even Microsoft, too.

I remember 15 years ago, our family invested in an upgrade license for Office 2000 Premium, at the time the cost was $350. Keep in mind, this was an upgrade, not a full license and it was only for one PC. This meant you needed to have a qualifying previous version of Office or a competitive suite such as Lotus SmartSuite or WordPerfect Office. Thankfully our IBM Aptiva had Lotus SmartSuite 9 which was used for the eligibility check. A year later Microsoft released Office XP, for us being naïve and enamored with having the latest and greatest spent another $330 just for the Professional edition. That was near $700 spent in just one year on Microsoft Office suites. No wonder it became Microsoft’s biggest cash cow.

Fast forward to 2015, you can now pick up an Office 365 subscription for just $7 (per month), but it’s interesting how much Microsoft is making Office even more accessible by making it affordable and easy to get, whether you are running OS X, Windows or even just a web browser. If you don’t need all the whizz-bang features of the suite, you can settle for the free Office Online, which includes essential features. The focus of this article though is not the free version, but commercial licenses that still exist as both perpetual and subscription. First of all, let’s define the two:

Perpetual – also known as a one-time purchase. Before Office 365, this is how everyone acquired a license for Office. You bought the suite from a brick and mortar store or an online merchant website such as amazon.com, which came in a shrink-wrapped box containing install media, a license, and thick user manual. You inserted a disc and installed the suite and used it forever on that computer or if the computer died or you got a new one, you transferred the license to that machine and continued using Office. You can still get Office this way, but it’s becoming the least preferred route.

Plan – with the introduction of Office 365 in 2011, Microsoft introduced a subscription model for the Office suite for the first time. The company has played with the idea of a subscription for Office as far back as Office 11 but never brought it to market until now. Subscriptions work like most utilities; you pay for the service for a certain amount of time. You can purchase Office 365 on a monthly or annual basis.

Plans

Office 365 is available in eight editions, but we will focus on the core versions available to consumers that include the following:

Personal Home
Microsoft Word Microsoft Word
Microsoft Excel Microsoft Excel
Microsoft PowerPoint Microsoft PowerPoint
Microsoft OneNote Microsoft OneNote
Microsoft Outlook Microsoft Outlook
Microsoft Publisher (PC only) Microsoft Publisher (PC only)
Microsoft Access (PC only) Microsoft Access (PC only)
1 PC or Mac 5 PCs or Macs
$70 per year or $7 monthly $100 per year or $10 monthly

For the perpetual license (one-time purchase), Office is available in the following editions.

Home & Student Home & Business Professional
Microsoft Word Microsoft Word Microsoft Word
Microsoft Excel Microsoft Excel Microsoft Excel
Microsoft PowerPoint Microsoft PowerPoint Microsoft PowerPoint
Microsoft OneNote Microsoft OneNote Microsoft OneNote
Microsoft Outlook Microsoft Outlook
Microsoft Publisher
Microsoft Access
1 PC 1 PC 1 PC
$150 $230 $400

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