Microsoft Wakes Up, Changes Office Licensing Terms To Allow Product Transfers

Microsoft has apparently realized that the changes it made to Office 2013's licensing scheme weren't going over well with its customer base and has agreed to modify the original agreement. Not long after the new Office suite launched, sharp-eyed bloggers noticed that the licensing agreement had been altered. Previous Office versions, including Office 2010, had allowed retail copies of the program to be transferred from one computer to another, provided the application was only used on one PC at a time.

Office 2013 changed that. The OEM and retail products both insisted that the program could only be installed on one PC, period, forever. If your PC died, or was replaced, you had to buy a new copy of the program. Since this change accompanied the launch of Office 365, the $99/year subscription service, it was obvious that Microsoft was trying to force ordinary consumers into the new (and vastly more profitable) program.

Today, blogger Jevon Fark posted on the Office blog that the company was walking back that licensing requirement. He writes:

Based on customer feedback we have changed the Office 2013 retail license agreement to allow customers to transfer the software from one computer to another. This means customers can transfer Office 2013 to a different computer if their device fails or they get a new one. Previously, customers could only transfer their Office 2013 software to a new device if their PC failed under warranty.

Fark promises that the actual licenses for all of the applicable products will be updated post-haste, but that this new agreement takes effect immediately. You have the right to transfer your license once every 90 days "except in the case of hardware failure, in which case you may transfer sooner." Office 2013 is still only sold in single-license variants, so anyone who hoped to buy a three-license Family Pack is out of luck.

This is a smart move for Microsoft. Whether the company had any intention of seriously attempting to block multiple reinstallations or not, the license backlash made the company look like a money-grubbing harpy. The bigger problem, however, remains unresolved -- An online version of Office simply isn't worth $99/year.

Why The Math Can't Work

Right now, Office 2013 is priced as follows:
Home & Student: $139.99 (Word, Excel, PowerPoint, OneNote)
Home & Business $219.99 (Word, Excel, PowerPoint, OneNote, Outlook)
Office Professional:  $399.99 (Word, Excel, PowerPoint, OneNote, Outlook, Publisher, Access)

An Office 365 subscription is $99 per year for up to five PCs. But not every PC needs Office, and neither smartphones nor tablets can run it. Windows 8's share of the tablet market is so tiny at this point, it's effectively nil for these purposes. Since Office typically runs on a three-year upgrade cycle, the cost of an Office 365 subscription over three years is $300. Two copies of Office 2013 retail, from Microsoft, comes out to $280.


Now, if you're a family that's PC heavy, and needs more than two copies of Office installed, and upgrades every three years, Office 365 may be a better deal for you. If, on the other hand, you tend to update every 6-10 years (and plenty of people do), than the math becomes ridiculous. The family three-pack of Office 2010 is $149.

Here's the thing: I like Office. I've even tried the most recent version of LibreOffice, and promptly headed back to Office 2007. I'm not going to bash Microsoft for wanting to make a buck off what I consider to be a superior product, but there's no way I'm going to sign up for Office 365 for the privilege of paying twice as much for the same software.

The licensing changes to Office 2013 are a good thing for customers, but they're also an admission that the Office 365 subscription isn't a particularly good alternative for anyone. Even without the three-pack family option, Office 2013 Home and Student is a better deal than Office 365 if you don't upgrade much. At $50 a year, O365 might start to make good sense in the consumer market. Without a price cut, it never will.