Microsoft unveils prices for cloud-based Office

Microsoft has officially launched its Office 365 Home Premium cloud-based productivity suite which it hopes will lure individual users towards a software subscription business model.

In Australia, non-commercial users pay $12 a month or $119 a year upfront for Office 365 Home Premium. The once-a-year payment option gives a discount of $25 on the monthly price.

Renters get the full complement of Office 2013 productivity applications, including Word, Excel, PowerPoint, OneNote, Outlook, Publisher and Access.

Users also get 20 gigabytes of cloud storage with Skydrive and an hour's worth of Skype calls each month to phone lines in over 40 countries with landlines only in Australia and New Zealand being covered, and mobile numbers excluded.

This compares to the one-off charge of $169 for Office Home and Student 2013 standalone edition with Word, Excel, PowerPoint and OneNote; or $599 for Office Professional 2013 that adds Outlook and Access.

The Office 365 Home Premium productivity suite can be installed on up to five Windows PCs or Apple Macs. However, Publisher, Access and OneNote are available only for Windows PC users.

Microsoft offers a free trial for one month, allowing people who decide not to continue the rental agreement after that period to save and retain their documents.

Look and feel

The new Office largely adopts the look of last year's Windows 8, with a cleaner, more modern-looking design and includes touch-screen capability.

The 'ribbons' showing commands in Word and Excel are mostly unchanged. For the first time the package includes online calling and video service Skype, which Microsoft bought in 2011.

Users' work can be stored in remote data centre and the latest version of a document accessed from any licensed device with a browser that the user wants to work on.

Two and a half years in the making, the new Office is designed to counter the growing popularity of Google Apps, a collection of online-only, Office-style applications Google provides free for home users and sells to businesses for $US50 per user per year.

"Today's launch of Office 365 Home Premium marks the next big step in Microsoft's transformation to a devices and services business," said Steve Ballmer, Microsoft chief executive, in a statement.

Tablet support

The new Office will run natively on Microsoft's own Surface tablets - both the 'RT' and Pro versions running on ARM and Intel chips respectively  — but it will not run natively on Apple's iPad, disappointing some iPad users who are also Office fans.

"We have not said that we will do rich client software on the iPad at this point," said DelBene, although he did not rule out producing such software in the future. "We've been very logical in our approach. I'm pleased with the software we have delivered for the iPad to date," he said.

Microsoft's SkyDrive online storage system and its OneNote note-taking software are available as iPad apps and iPad users can use limited Web versions of some Office applications.

The iPad issue has been a long-time quandary for Microsoft, which might gain more mobile users by making Office available on the iPad, but also removes a major incentive to buying its own competing Surface tablet.

The rollout of Office 365 for corporations, Microsoft's core market, has already started, but the new product will not be officially launched until February 27. The new Office applications have been available to large volume business customers since December.

Microsoft estimates that 1 billion people worldwide use some part of Office and the unit that produces Office is Microsoft's most profitable, edging out the flagship Windows division for the last few years. It now accounts for more than half of Microsoft's overall profit.

Sales dipped last quarter as consumers held off in anticipation of the new Office, but analysts expects sales to ramp up again this quarter.

"Microsoft has been criticised not only for pricing, but also for not innovating Office quickly and being slow to respond to the move to the Web or to mobile," said Michael Silver, an analyst at tech research firm Gartner.

"Office 2013 addresses some of the criticisms, but Microsoft still has the power to maintain its pricing levels."