Microsoft Office used to be a much simpler product to buy – you chose between a couple versions, paid for it, got your disc and your product key, installed it on a computer, and you were done. With Office 2013, you still have that option (or something close to it), but Microsoft is pushing heavily towards the subscription model (for better or worse) and this has made choosing a version of Office 2013 a slightly more complicated affair. To their credit, Microsoft has done a pretty decent job of making the subscription model appealing in many scenarios, though there are still cases where the one-time purchase is a better buy. Hopefully this guide will help you evaluate your needs and choose wisely between Office 2013 vs Office 365.
So let’s start with the basics of Office 2013 vs Office 365. There are three versions of Office 2013 that you can buy straight out: Home and Student, Home and Business, and Professional. I should note, none of these include any extras besides 7GB of free Skydrive (which is something anyone can have for free with or without a copy of Office). So first there is Home and Student Edition, which costs $140 and is the barebones minimum – Word, Excel, Powerpoint, and Onenote (no Outlook). This version is not licensed for business use. Next for $220 is Home and Business, which adds only Outlook and the license to use it for business. Lastly for $400 is Professional, which adds in Publisher and Database. All of these versions are licensed for only one computer, so it can only be installed on a single computer. According to Microsoft, you can transfer the license to another computer once every 90 days. Other than that, this version of Office is pretty straight forward.
Now for the slightly more confusing part – the subscription model. There are various subscriptions available and they seem to cover a somewhat random variety of options and features. First I will cover licensing and different features, then I will get into costs and what each one offers.
This is fairly simple in the subscription model. For any subscription based version of Office 2013, you can install your licensed copy on 5 of your PCs. Each PC is associated with your Office 365 account and can be viewed in its online portal. That way if you reach your limit, you can revoke/deactivate Office on one of your PCs and move it elsewhere. The only version that has a slightly different scheme is Home Premium – it functions exactly the same way but it is the only licensed for home use.
Skydrive is Microsoft’s cloud storage system, similar to programs like dropbox. Skydrive is baked in/heavily integrated with Office 2013, so you always have the option in those programs of saving items directly to Skydrive. This is especially convenient if you have Onenote or other Office programs you’re your smartphone, as they will open files directly from your Skydrive. Anyone can use it for free with 7GB of space. You can get more space either by paying for it, or one of the subscriptions comes with a bit extra.
Some versions of Office 365 include the ability to temporarily stream versions of Office 2013 to PC which it is not normally installed on. This is possible because Office 2013 is built to allow streaming only necessary components. You might notice that when you first install Office 2013 it only takes a couple minutes of downloading before you’re allowed to use it, even though it continues installing in the background. This is the same concept – as it’s installing, it streams only the features you are trying to use as you go. Some Office 365 subscriptions include, this, others just include access to the Microsoft web apps, which lets you do basic views and edits to Word, Excel, and Powerpoint documents.
Office 365 (Hosted Exchange) Email
This falls a bit outside the realm of this article, as this article focuses mostly on Office 2013 (where as a large chunk of this website is about Office 365 Exchange), but it is included with some subscriptions, so I will mention it. This is Microsoft’s hosted exchange platform – you can set up your own company and use your own domain name for your email here, and exchange will with Outlook, Microsoft’s web access, and most smartphones and tablets out there today. Exchange is a rather critical email service for any business, and especially for smaller businesses, having it hosted (by Microsoft or another provider) is by far the most cost effective and convenient option. You can also get exchange email hosting from Microsoft by itself in various forms – there are quite a few subscription combinations you get have, but I won’t get into all of that in this article. For tips on choosing an email plan, see this article.
License for Lync
Lync is Microsoft’s chat client – it does text chat, voice, video, screen sharing, meeting tools, etc. To use it you must have an Office 365 subscription that includes it. If you don’t and you still want to use it, you can purchase a separate (and very cheap) subscription for it. More info on Lync can be found here.
Office 365 Home Premium – this is basically the option for home users who would normally just buy a basic version of Office but might be tempted towards the subscription model with the flexibility and all the extras (especially the extra licenses). Microsoft tries to make it a bit more appealing from a price-standpoint by including a full suite of apps, 5 pc licenses (usually meant for all the PCs in a household), 20GB of skydrive space, and 60 minutes of skype credit a month (kind of random, but hey, why not?).
Office 365 Small and Medium Business – this option is for small and medium sized businesses need both hosted email and office for all of its users. It offers a full suite of Office apps, hosted email, and license for Lync, which is an extremely handy tool to have in a business of any size. The small business package can only be used for a max of 25 users in one business. The medium business package ups that to 300 users and includes the ability to sync your active directory with office 365. More info on that feature can be found here.
The Office 365 Enterprise E3 – this option is mostly for large businesses (though can sometimes be useful to smaller and medium sized businesses) that need both hosted email and office for all or some of its users. It offers a full suite of Office apps, hosted email, and license for Lync, which is an extremely handy tool to have in a business of any size. The small business package can only be used for a max of 25 users in one business. The medium business allows for unlimited users and includes the ability to sync your active directory with office 365. It also includes unlimited space for email archiving.
Office 365 Pro Plus is more of the standalone/business version of the Home Premium option. It includes the full set of Office apps, a lync license, and the ability to stream office apps. This option is best for businesses that want all the advantages of renting apps but don’t want Microsoft hosted email. It is also good (and this is the most common usage I’ve seen) for businesses that already have an Office 365 email subscription, but just want to add a few spare Office 2013 installs around.
Office 2013 vs Office 365 – Which is best for you?
Microsoft seems to have done its best to make the stand-alone Office 2013 option available, but still thoroughly unappealing compared to its subscription based counterparts (as they are pushing strongly for everyone to switch to subscriptions). Which option is best for you depends on your situation, but for the stand-alone Office 2013 option, the best scenario for that is usually one where you know you just need the apps, and only the apps, for a long period of time on a single computer. As soon as you start needing it on multiple computers, needing hosted email, needing office on the go, etc… the standalone model quickly loses its cost effectiveness. The standalone model has a fixed cost, whereas the cost of the subscription options can easily be calculated depending on how long you think you will have them.
The Home Premium option is one that is best in a scenario where you have multiple computers at home and need office on all of them, and/or if you need office on the go a lot – the mobile and streaming options make this very appealing for that scenario. It is not licensed for business use though, so it’s really only good for use at home.
The Office 365 Small and Medium Business options are best for businesses that need email and office for every user, and especially if those users have multiple computers each (like their own office computer + laptop). The reason I haven’t seen this used too often with any of my own customers is that they are usually coming in with lots of computers with fully purchased, slightly older versions of office. So when they need email, they go with cheaper hosted email Office 365 plans and forgo renting office. But this is the most cost effective option for businesses that want full email hosting and the office suite for for all users at once. If you want to try it out, Microsoft offers a 30 day free trial for both of these plans. You can sign up for a Small Business Premium trial here and a Medium Business trail here.
The Office 365 Enterprise E3 options are best for larger businesses that need email and office for every user, and especially if those users have multiple computers each (like their own office computer + laptop). It also works very well for any sized businesses that just want email for everyone and email/office combo for some users (in which case they would get an email only plan for most users and then the E3 plan for users that need Office as well). Of course you can achieve a similar combination with an email only plan + Office 365 Pro Plus, but some of the details will be slightly different. In the end, there are quite a few ways to slice it, but this is one of the more complete options. Microsoft offers a 30 day free trial for this as well, which you can sign up for here.
Office 365 Pro Plus is actually the option I see used most commonly by small and medium sized businesses. This is because they are usually already using Office 365 hosted exchange for email, but their office is full of older versions of Office (2003, 2007, and 2010). It is the best subscription plan for slowly transitioning out of older versions of Office while having all users on Office 365 email. And as with the other versions, there is a 30 day trial of this available here.
In conclusion, there’s no one plan that is best for everyone. While many might feel like they are slowly being forced into more expensive plans (and there certainly could be some truth to this – Microsoft is here to make money after all), for the most part there are way more options to choose from than there used to be, and the field has gotten more complex with the addition of other hosted services (exchange, lync, skydrive, streaming, etc). To decide which plan or option is right for you, the best thing to do is figure out what you need, what each option costs, how long you’ll need it for, and then do the math. Hopefully this article and chart will shine some light on the various options and costs to make your decision easier. If you have more specific questions or need help deciding, free drop us an email as well.