Ever since the introduction of the Office ribbon in Office 2007, I have begun to think Microsoft has a secret soft spot for open source software. No action prior to this had motivated me more to look at open source offerings. With Office 365, the version associated with Windows 8, Microsoft again provides sufficient motivation to look at alternatives*.Until today, I haven’t given much thought to Office 365. I work with a mix of Office applications (and alternatives) including Office 2010 and, for my day-t0-day writing, Office 2003. Office 2003 does everything I require and doesn’t have a ribbon on top.
Microsoft has followed several other companies into the subscription model plan. What is new and interesting in a train wreck sort of way is the introduction of boxed version of Office 365 into retail. Now this product is different from Microsoft Office 2013, but that may not be apparent to retail buyers. Microsoft Office 2013 is the real deal and you can get it in the Microsoft Office Home and Student 2013 for $139.99, Microsoft Office 2013 Home & Business for $219.99 and Office Professional 2013 for $399.99.
So where is the trainwreck? On a recent visit to Costco, I visited the bright, two colored display for Microsoft Office. But this display was for Office 365. It was filled with very small key card boxes of Microsoft Office 365. The display was fairly informative but really, there is no way to tell from the display that there is a difference between Office 365 or Microsoft Office 2013. There wasn’t any real warning that this is for a subscription only product of Microsoft Office. Unlike you and me, not everyone who uses Microsoft Office thinks about subscription models. They buy Office to use Office, and that is it. They aren’t interested in subscription models, or surprises at the end of 12 months that their copy of Microsoft Office is going to die. The few buyers I saw clearly thought they were buying old Microsoft Office.
Microsoft is putting Office 365 into the channel for two reasons. The first is that like many other companies, they want to move to a metered, subscription based service. You have better, direct customer engagement. While some retailers have made some effort to embrace this model, such as Best Buy offering subscription based anti-virus, retail and the channel are not fooled by this move. Once you engage a customer in a direct, subscription based system, the customer ceases to be yours and now belongs directly to the vendor. Kiss your upgrade and return sales goodbye. And that leads us to the second reason.
Microsoft knows the channel knows. They are putting Office 365 into the channel because they know the channel is still a major source of revenue. Microsoft made itself on its partnerships with distribution and retail, and they continue to make it there. If major store chains like Best Buy, office chains like Office Depot or direct / catalog / site resellers like CDW and Amazon decided they have had enough of Microsoft, it would really hurt. The channel also knows that Microsoft already burned its hardware partners by making the Microsoft Surface, rather than relying on OEMs exclusively. They get it – Microsoft wants to go the same way as Apple, and move its goods as expediently as possible to direct sale – at least in areas where Microsoft knows it can do so and still meet customer expectations.
It will be interesting to see what happens in 12 months when so many buyers realize their software is about to die and they will have to pay again. While I may end up using Office 2013 because I get it with a new PC, I will be deleting the Office 365 trial shortly after opening the box.