Microsoft Corp. (NASDAQ: MSFT) has decided to allow businesses to license the new version of its widely used and highly profitable Office product. The move may be an acknowledgement that companies have moved to software purchase models that include access to products over the cloud, or access for only as long as they need a product. Whatever the cause, the move risks a large portion of the revenue from Office, a mainstay of Microsoft’s hugely profitably Windows franchises.
Microsoft will be offering Office as a subscription service for consumers. For $100 a year, “Office 365 Home Premium” customers can put Office on up to five computers including Macintoshes and Windows 8 tablets and store up to 27 gigabytes of data on Microsoft’s SkyDrive cloud storage service. The subscription includes frequent software updates and allows users to automatically load their customized Microsoft Office settings on each different device.
Office 365 users will also be able to get “Office on Demand,” a feature that allows them to temporarily access the latest version of Office on any computer through a Web browser — whether or not that device has the program installed. One caveat: Once you stop paying, you lose the software.