Office Licensing

Microsoft Office Licensing

Most businesses use Microsoft software in their day to day work.  Applications such as Word, Excel, PowerPoint, and Outlook are staples of the business world.  Microsoft has been trying for years to urge businesses to adopt Office 365 and its monthly subscription model.  They gave folks another huge shove in that direction recently when they released changes to the perpetual licensing model for office.

Microsoft recently changed the end of support for Office 2016’s right to connect to cloud-based services.  The change essentially cuts in half the former timeline for support from 10 to 5 years.  This will impact businesses because it means that after that time they will no longer be compatible with hosted exchange online, or OneDrive outside of the mainstream support timeline.

Many businesses have been using a combination of perpetual licensing and hosted exchange to save on Microsoft licensing costs.  By holding onto their perpetual licenses for 5 or 6 years, and essentially skipping a version of office they could stand to save a few hundred dollars per machine.  That can be a significant cost savings for businesses with 100 machines or more.  By mandating that perpetual office can only connect to Office 365 for a maximum of 5 years, Microsoft ensures that customers can’t use this method to recognize significant savings.

In addition, starting with Office 2019 companies will be forced to purchase each version of office to stay in support.  “In 2023, only the traditional version of Office after Office 2019 … will be able to access Office 365,” Kleynhans and Silver said. “Of course, at that point, organizations would need to purchase every Office release without skipping.”

Make the move….or else

The point of all these new rules is to push, prod, or otherwise motivate customers to purchase Office 365 by eliminating any financial benefits the perpetual office package harbors.  The big push for Microsoft is to get subscribers along with the regular revenue they generate.

Microsoft, for the immediate future has committed to continuing to offer perpetual licensing for the office suite.  However, as all the new rules go into effect and all advantages to perpetual licenses go by the wayside, it’s likely the model will be abandoned completely at some point.  When that will be we really don’t know.

In addition, don’t be surprised if Microsoft makes future adjustments that put perpetual Office in an even more disadvantageous position.  Evidence of this is how they recently raised the price of Office 2019 Retail by 10%.  You may also see elimination of the low-end office 365 products such as E1, but that is yet to be seen.

For now, it means that business owners should probably just accept office 365 as their new reality and make plans and room in the budget for the subscription that comes with it.  Microsoft is still the standard for office productivity, and the new office 365 suite has some great features.

As always, i.t.NOW is here to support you with any of your Microsoft Licensing questions or other support concerns.  Give your friendly account manager a call anytime to discuss your specific situation and needs.