Microsoft Office Gets Better, But…

In previewing Office 2013, Microsoft did not disappoint. With the upcoming release, Microsoft will continue the transition of Office from a suite of traditional native applications (running solely on the computing device) to suite of hosted applications and services running in the cloud or what the company calls “the modern office.”

The cloud-based version, Office 365, offers all the bells and whistles plus on-line storage (SkyDrive), savings of user preferences and templates, and even the ability to remember the last position edited in the document.

In addition, Microsoft is increasingly adding collaboration and social networking features through the integration of Skype, Yammer, and SharePoint. Even the continued evolution of OneNote, the all-purpose multimedia notepad, is impressive and easy to use. And as expected, Microsoft is building on the enhancements of the upcoming Windows 8 by adding multi-touch capability, as well as the ability to use other peripherals like laser pointers and stylus pens.

Microsoft even seamlessly integrated the applications into the Windows 8 Metro-style interface. From the standpoint of a general productivity tool for documents, presentations, spreadsheets, and office collaboration, Office 2013 continues to be the premier solution. But for many individual consumers, the price of the cloud-based flexibility offered by Office 365 may still be too high.

While the price of buying the application suite outright is not that unreasonable (Office 2010 sells for roughly $119 to $279 for home use depending on the version and number of users), some of the most powerful and cool features are linked to the cloud version Office 365, which currently costs anywhere from $6 to $20 per user per month.

Although Microsoft is targeting Office 365 at SMBs and enterprise users, students and consumers want the same features and flexibility offered in a social and cloud-based world. Even at $6 per month, a one year subscription is more expensive than what the average university student can purchase the application for at the campus bookstore (Office 2010 sold for around $69).

And our, TIRIAS Research, consumer research has shown that monthly bills tend to cause more anguish with consumers than even large one time purchases.  In addition, only the cloud version will provide the true flexibility of switching between different computing devices like a notebook, tablet, and smartphone, without the hassles of managing the different versions and memory constraints associated with the more mobile platforms. This monthly-charge business model will continue to open the door for competing through the alienation of many individual consumers.  

Even with this limitation, however, Office continues to prove its value in the business world. Hopefully future version will also incorporate more premium applications such as a customer resource management, project planning, or even a full database solution. The addition of such applications would further enhance the capabilities of Office and may help some enterprise users justify the cost.


Jim McGregor
TIRIAS Research
Founder/Principal Analyst