February 04, 2013, 4:21 PM — The new Microsoft Office is here. As with the previous versions, you can get Word, Excel, PowerPoint and more as a locally installed suite of applications or as Office 365, a cloud-based subscription. However, choosing between Office 2013 desktop software and the new Office 365 is a dramatically different decision than in the past.
This time, there is virtually no decision to make. Comparing Office 2013 to Office 365 is an exercise in semantics; Microsoft has significantly stacked the deck to favor one over the other.
There is a clear distinction between the two options. Office 2013 describes only the desktop applications. By contrast, Office 365 is a Web-based platform that pairs the Office applications with cloud storage. In the past, though, the Office 365 versions of the software had limited features and capabilities compared to the full desktop versions, and if you didn't have an Internet connection you didn't have Office.
With the new versions of the productivity suite, though, Office 2013 vs. Office 365 is a smoke-and-mirrors debate. Office 2013 is more expensive than Office 365, and the license is only good for one machine. If you only need the core applications (Word, Excel, PowerPoint, and OneNote) you can get Office 2013 Home & Student for $140. Throw in Outlook, and you get Office 2013 Home & Business for $220. Office 2013 Pro adds Access and Publisher, all for $400.
Office 365 comes in two flavors: Office 365 Home Premium for $100 per year and Office 365 Small Business Premium for $150 per year. Both come with the full Office 2013 Pro software for your PC, but there are key differences. Up to five people can use Office 365 Home Premium on up to five devices, with each user getting an Office experience customized to their own Microsoft ID.
Office 365 Small Business Premium also comes with five licenses, but billed per user per year. Each user can install and use Office on up to five PCs, but the licenses can't be shared with other users. Office 365 Small Business Premium also includes a managed Microsoft Back Office environment including Exchange, SharePoint, and Lync.