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Office 2013 Version Economics: An Example.

Office 2013 Version Economics: An Example.

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Woody Walton

 

Well the new year is almost upon us and I thought I would close out 2012 with an illustration of why a customer might choose to purchase Office 2013 though either our volume licensing programs or through our Office 365 subscriptions, rather than buy it through retail, such as Office 2013 Professional, via OEM or PKC.  A good summary of reasons was posted by J.J. Antequino here on this blog last month, but he focused on the volume license versions of Office 2013 exclusively (Office 2013 Standard & Professional Plus).  I intend to add a the cloud based version of Office 365 Pro Plus that is forthcoming and also further elaborate on additional reasons with examples below.

I am routinely asked why on earth someone would pay potentially $200.00 more for a volume licensed version of Office, when “cheaper” alternatives exist through the licensing models already mentioned above (retail, OEM, PKC.).  Unfortunately, the answer is simple on the surface, but complex in the delivery.  My simple answer is “well, they are not purchasing the same thing so the price comparison is not valid”.  …of course that leads to the lengthy discussion on how to approach the conversation and whether or not  certain constituent Office products are necessary. Astute partners are aware of the differences, at least most of them, but I seldom find partners that can articulate ALL the differences, nor why they might matter in customer scenarios.  The fact we are adding new cloud based versions of Office with Office 365 will only confuse matters further in the short term.  In the long term I believe the subscription solution offerings in Office 365 force us all to speak in terms of the total productivity solution of which the classic “Office” is only a part.

 

Before we go further examine the comparison table below (click to enlarge):

 

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This table does not offer a complete comparison as it excludes the additional value in the Office 365 offerings, but a few things should stand pout as being quite different.

 

J.J. did a good job of mentioning some of the enterprise value  capabilities that may matter to your customer is his post, so I will not belabor those points here.  He also mentioned the fact that you get multiple installations (same primary user) with the volume licensed versions of Office 2013.  This becomes increasingly important in our world of device proliferation.  Updated content that I have recently seen (and is delineated in the above matrix) shows 5 PC or MAC installs with Office 2013 Pro Plus or ANY of  Office 365 offerings I will discuss below.   So Office 2010  Professional PKC, which sells for ~$337.00 at CDW, is limited to one device install, is not transferable, is technically tied to the computer it is installed on, and does not include InfoPath (a great value for those using SharePoint or SharePoint Online), nor the Lync Client.  Office Pro Plus 2013 with an MSRP of $508.00 provides two additional pieces of software, allows for the installation on 2 separate devices, extends commercial rights to Office 2013 RT running on Windows RT devices for that user, not to mention the other enterprise capabilities J.J. mentioned such as terminal services deployment (RDS), App-V deployment, etc.

 

If your Customer has two primary devices, which is exceptionally common, Office PKC or retail does not stack up.  The retail version of Office Professional is only a few dollars less, but also does not include InfoPath or Lync, the Office Web Apps on SharePoint, nor could you install it on up to 2 PCs or MACs in the 2013 version.

The Multiple device argument for Office365 only gets better when you add the mobile device installation benefits of Office 365 Pro Plus through an Office 365 subscription.

See the tables below:

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Under licensing there is a line marked “Mobile Installs”.  Microsoft has stated that as versions of Office become available for other platforms (we have OneNote and Lync at present for iOS and Android) we will make that available through our subscription platform!

 

What customer do you know that does not have a smartphone, an iPad,, etc?

 

If we look at the Office 365 Midsize business subscription, which is $180.00 per year, and compare it to a perpetual license of Office Professional PKC, we would see that for an organization with users that have several devices (tablets, PC, laptops, mobile phones, etc.) it would make more sense to subscribe to Office 365.  for example, to get the same benefit as the core Office applications and associated installations on only 1 extra client device (not including the value of the Online services themselves Office PKC falls apart quickly:

 

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Even if you state that applications like InfoPath or Lync are not needed, or the Office RT Commercial use rights, that still leaves two copies of the PKC at roughly $680 vs. Office 365 Midsized Business with Office 365 Pro Plus at $540 dollars over three years.  This of course excludes the value placed on the online services as well.   When you add the provision of upgrades to new versions with the subscription service, the value continues to increase.  Let’s say a new version of Office comes out in the forth year; If the customer wanted to remain current, new PKCs would need to be purchased, whereas the subscription carries on at the same rate.   Office PKC would be $1360 (680+ another 680) and Office 365 Midsized Business would be $720.00.  Even after year 5 you would still have saved $460 excluding any value placed on the other services.  Of course if we added a third device to the equation the math gets all the more worse for Office PKC.

The world of software licensing is changing to accommodate the way people are using software.  Microsoft is making their products more affordable for organizations with users that have multiple devices (the norm).   Make certain you articulate this well.

 

Happy New Year!

 

 

-Woody

 

Comments
  • Reading through this post leads one to believe that the Office Professional Plus (non-O365) entitles one to 5 device installs per user. Having read through the January PUR, the terms have not changed and allow a second install on a single portable device.

    "Unless you license the software as an Enterprise Product or on a company-wide basis, you may also install the software on a single portable device."

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