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Apr 06

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Office switches to a subscription model – and it’s worth it

Microsoft recently started offering a Office Suite product geared towards families: Office 365. For an annual subscription fee of $99.99, Office 365 gives access to the entire Microsoft Office suite, plus cloud storage and free calls using Skype. Below is quick and dirty comparison pricing between Office 365 and the individual products purchased piecemeal.

What Office 365 offers is as follows:

  • Access to the entire Microsoft Office suite (Word, Excel, PowerPoint, OneNote, Outlook, Publisher and Access) on five computers, with updates as they are released. Microsoft Office Professional, which costs $399.99 per license, also provides access to the entire Office suite, but five licenses will cost $1999.95.
  • 20GB of cloud storage on Microsoft SkyDrive. Microsoft SkyDrive offers 7GB of cloud storage for free. An additional 20GB can be purchased for $10 per year.
  • 60 minutes of Skype phone calls per month. Skype Pay As You Go credit costs 2.3¢/per minute. 2.3¢ for 60 minutes for 12 months would cost $16.56.

Clearly the $99.99 annual price tag for Office 365’s subscription is dwarfed by the $1,999.95 plus $26.56 annual cost of the same services purchased individually. In fact, it would take over 25 years to hit breakeven. Even choosing to buy a simpler version, such as the Home & Student edition at $139.99 per license, only improves the breakeven point to about 7 years. An additional consideration further sweetens the deal: Office 365 includes future updates to Office, while he individual licenses do not.  Overall, not a hard call for the family who uses Microsoft.

 

 

About the author

Brian Nolte

I am a Consultant with Fulcrum Inquiry, LLP, an accounting and economics consulting firm that performs economic damages analysis involving commercial litigation, financial investigations, business valuations, and forensic accounting.

Permanent link to this article: http://betweenthenumbers.net/2013/04/office-switches-to-a-subscription-model-and-its-worth-it/

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