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Office 2013 retail licensing change ties suite to specific PC forever

February 15, 2013 10:28 AM ET

It doesn't take an expert to guess Microsoft's motivation for the tougher line. "They want to drive people to the new Office 365," said Jeff Muscarella, a partner with Atlanta-based consultancy NPI.

"It's part of the carrot and stick," agreed Rob Horwitz of Directions on Microsoft, a research firm that focuses on the Redmond, Wash., developer.

Pushing Office 365

Microsoft said almost the same. When asked why it had not told customers of the change in ways other than to simply tuck it inside the EULA, which relatively few read, its answer was revealing. "We've been very clear in all of our communications that customers seeking transferability should get Office 365 and that Office 2013 is licensed to one device," the Microsoft spokeswoman said in an email reply to questions.

Perhaps. Although Microsoft has noted that Office 2013 can be installed on one, and only one PC -- a change from Office 2010, which was available to consumers and small businesses in multi-license packages -- it has not publicized the fact that once installed Office could not be moved, even to another system owned by the customer. In fact, the Office 2013 EULA issue went unreported until Melbourne's The Age noted the change in a news story titled "Does your copy of Office 2013 die with your computer?"

Office 365 does boast, as Microsoft put it, "transferability." The by-subscription plans let customers pull a license from one machine and move it to anther with a few clicks on a management portal. Office 365 Home Premium, which Microsoft rolled out last month, provides five Office licenses that can be assigned and reassigned at will to a household's computers.

Microsoft is to launch a line of subscription plans for small, medium and large businesses later this month.

As Directions' Horwitz noted, Microsoft has both offered a carrot and brandished a stick to nudge customers to its software-by-subscription concept.

Price changes

One of the carrots has been pricing. Microsoft sells Office 365 Home Premium for $100 annually, or $10 monthly. For families that want Windows' Office 2013 or OS X's Office for Mac 2011 on four or more PCs or Macs, Computerworld's analysis has shown that Office 365 is a better deal than buying separate "perpetual" licenses, the buy-once-use-forever kind sold at retail.

But it's wielded a stick, too. To make those perpetual licenses less attractive, Microsoft raised prices as much as 17%, and eliminated the multilicense packs of Office 2010 it sold to consumers and small businesses.

The change to the perpetually licensed, retail copies of Office 2013 is another stick, the experts said. "Through licensing, Microsoft is pushing technology in the direction they want to go," said Ullman. "And they're definitely pushing customers to Office 365."

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