Microsoft's moves foreshadow price hike for Mac Office

New Office 365 subscription plans will be tough sell unless company raises prices for Office for Mac 2011, ditches multi-license discounts

By , Computerworld |  Software, Mac Office, Microsoft

The case for Office for Mac 2011 is even stronger if Microsoft retains its three-license Home & Student edition after launching Office 365.

To equip three Macs with Home & Student, consumers fork out just $150, or $50 per license. Over a five-year span -- the average length of time between Office upgrades -- the cost comes to $10 per year, per license.

Current Office for Mac 2011 prices make the upcoming Office 365 subscription plan uneconomical unless customers install all five allowed copies of the suite. (Data: Microsoft.)

Using Office 365 to install the application suite on the same three Macs, however, would cost $33.33 per year per license, or more than triple Office for Mac 2011.

Even if Microsoft scrubs the multi-license SKUs, Microsoft would be hard-pressed to make Office 365 attractive if it does not also raise prices of the single-license copies.

Four copies of Office for Mac Home & Student 2011 at current prices would cost $480, less than the $500 for five years of Office 365 Home Premium, the SKU that gives Mac owners access to the suite. The per-year, per-license breakdown: $24 for four copies of Office for Mac 2011 versus $25 for Office 365 if just four of the five allowed installs are used.

Only when five installs are factored in over a five-year period does Office 365 come out cheaper: $20 compared to $24 on a per-year, per-license basis.

Microsoft, of course, faced the same pricing dilemma with Office 2010 on Windows, and did raise prices of Office 2013 single-license SKUs to make them unappetizing when compared to the Office 365 "lease-not-own-software" plan.

If Microsoft has decided to bump up prices of Office for Mac 2011 -- and scratch the multiple-license SKUs -- one appealing date to do so would be on Oct. 19. That's when Microsoft will kick-off an upgrade program for buyers of Office 2010 and Office for Mac 2011.

"Starting October 19, people who purchase Office 2010 or Office for Mac 2011 will qualify to download, for free, one year of Office 365 Home Premium or the equivalent Office 2013 offering, when available," Microsoft announced last week.

In that statement, Microsoft made no mention of the Mac's $150 three-license Home & Student or the $200 two-license Home & Business, or how buyers of those SKUs would be compensated for their purchases on and after Oct. 19.

The omissions may be a clue that Microsoft plans to dump those editions, and, like its move on Windows, boost prices for Office on the Mac at the same time.


Originally published on Computerworld |  Click here to read the original story.
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