Office 2013 vs. Office 365

The two Offices share the major components — Word, Excel, PowerPoint, and (optionally) Outlook — but just about everything else is different.

Buy or rent: Two approaches to acquiring Office
For home users the key difference between Office 365 and standalone Office 2013 comes down to licensing. Here’s what you need to remember:

As with all previous Offices, when you buy Office 2013, you get a license that effectively lasts forever. (As with most software, you don’t actually own your copy of Office; you buy a license to use that copy.) However, unlike earlier Office versions, that license is valid only on the one machine on which you install Office 2013. If you sell the machine, the license travels with the machine. If the machine dies, or you upgrade to a new computer, you’re SOL.

When you pay for Office 365 Home Premium, you rent the Office 2013 programs (listed below), and you have to keep paying, year after year, to continue using them.

The Office 2013 license lets you run one copy of the Office 2013 programs on one computer. Office 365 Home Premium’s license lets you run the Office 2013 programs on up to five PCs (or Macs) in the same household.
(For comparison, an Office 2010 Home and Student license lets you run the suite on three computers within the same household. Each copy of Office 2010 Home and Business and Office 2010 Professional can be run on two systems — essentially a primary PC and a portable device such as a laptop.)

As in the past, if you purchase Office 2013 and want to upgrade to a newer edition (2014 or 2015 or whatever), you’ll have to buy it. Office 365 subscribers, on the other hand, will get new versions of Office free. (That’s the theory — we haven’t actually seen an upgrade cycle happen yet.)

There are many more minor differences for home/small-business users. Corporate users have all sorts of additional headaches — er, opportunities.

Many choices: What’s in an Office suite?
If you thought keeping track of Windows 7 versions would drive you nuts, Office is probably worse. Office 2010, for example, came in five flavors:

Starter: a limited-function, ad-supported, free edition often bundled with new systems;
Home and Student: includes Word, Excel, PowerPoint, and OneNote;
Home and Business: adds Outlook;
Professional: adds Publisher and Access;
Professional Plus: adds InfoPath, SharePoint, and Lync; corporate volume licensing only.
(You can no longer buy Office 2010 from the online Microsoft Store, though it’s still widely available via online retail. Microsoft’s Office Pre-Launch Offer, which expires April 30, 2013, lets anyone who purchases a new copy of Office 2010 after Oct. 19, 2012, get a free upgrade to the 2013 version. The same offer will also give you one free year of Office 365 Home Premium.)

Microsoft offers Office 2013 in a similar array of confusing configurations. Office 2013 Home and Student, Home and Business, and Professional have the same productivity apps as the 2010 versions. New Office 2013 editions include:

Standard: adds Publisher; corporate volume licensing only;
Professional Plus: adds InfoPath and Lync; corporate volume licensing only.
There’s one more version — Office 2013 RT — which is available only pre-installed on Windows RT devices, such as the MS Surface RT. Office 2013 RT has modified versions of Word, Excel, PowerPoint, and OneNote. I haven’t found a definitive list of the RT version’s limitations (though given the pace of Windows RT sales, it’s doubtful anyone will take the time to document those differences any time soon).

If you’ve got that straight, let’s take a look at Office 365.

Office 365 Home Premium comes with Word, Excel, PowerPoint, OneNote, Outlook, Publisher, and Access. You also get 60 minutes of Skype calls per month and up to 20GB of SkyDrive storage.

Be forewarned, however: all systems on the same Office 365 Home Premium account share the same SkyDrive cloud-storage pool. Everyone using the account can see each other’s cloud-based files.

Office licensing gets considerably more complicated for companies and organizations. For example, Office 2013 Home and Student may not be used for commercial purposes. In theory, if you work out of your home and want to use Office 2013, you have to purchase Office 2013 Home and Business or Office Pro.

Similarly, Office 365 Home Premium may not be used for commercial purposes — you have to move up to Office 365 Small Business Premium or Pro Plus, which have many more features and are considerably more expensive. (Both versions are expected to ship by the end of this month.)

Running the numbers: The cost of Office
If you want to buy Office 2013, the suggested retail prices for each PC are these: Home and Student, U.S. $140; Home and Business, $220; and Professional, $400.

Office 365 Home Premium (with the same apps as Office 2013 Professional) costs $100 per year for up to five computers (PC or Mac) in a household.

You’ll have to do the math on whether it’s better to buy or rent Office 2013. If you have a house full of PCs (well, up to five), you get a lot of value from Office 365. On the other hand, if you’re interested only in the basic Office apps on one or two systems (or you’re sending your kid off to college), purchasing Home and Student probably makes more sense.

Remember that small offices and home businesses may not legally use Office 365 Home Premium or Office Home and Student 2013. All things considered, you’re probably better off renting Office for business use.

In years gone by, Microsoft offered special Office upgrade pricing. If you owned a copy of Office X, you could upgrade to Office Y at a substantial discount. It doesn’t look like Microsoft’s going to make those kinds of offers in the future. The Softies want to shift over to SaaS — Software as a Service — where they get a steady, predictable income flow, year after year. Don’t be too surprised if the same concept migrates over to other Microsoft software you currently own.

Consider your need before buying — or renting
More than a decade ago in Australia, New Zealand, and France, Microsoft tried to get customers to rent Office XP. The attempt failed miserably. I heard lots of excuses at the time, but the pervasive argument went like this: customers just weren’t ready to rent software. It remains to be seen whether today’s customers will see Office 2013 as a completely different kettle of fish. Services such as Netflix, antivirus subscriptions, and higher-capacity cloud storage have made PC users more open to pay-for-services models. However, even opportunities to rent software outright are still relatively rare. For example, only a few of the apps in Windows 8′s Windows Store are for rent.

If you’re thinking about upgrading from Office 2010 to Office 2013 for all the new features, I hate to burst your bubble. For most Office users, there are few — if any — compelling reasons to buy Office 2013.

If you choose to rent Office, keep one critical detail in mind: if you don’t make your rental payments, Office drops back to a stunted, read-only mode. That’s a powerful incentive to cut the check every year.

Office 2013 is available in all the usual retail outlets (as well as MSDN and TechNet). You can sign up for a one-month free trial of Office 365 Home Premium on the Office home page. (In fact, the Office site seems designed to strong-arm you toward Office 365.) The business versions of Office 365 are, for the moment, still on the Microsoft Office Preview page.

Or, if you feel like kicking the Office habit, try the new, free LibreOffice 4.0 (site).

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