Those who have gone shopping for groceries or gas or any of the basics that keep life afloat these days have probably taken notice of the fact that those prices seem to be on the rise lately. It's not just bread and milk that are climbing, though, as even Microsoft was recently spotted raising prices on its Office for Mac 2011 suite, hiking the price fully 17 percent. What's more, Microsoft also put an end to the multi-license packages. But what's behind this sudden change for Microsoft offerings?
The sudden rise in price, and the end of multi-license packaging for Office for Mac 2011, means that Office for Mac 2011 is now operating on the same pricing schedule as its nearest Windows equivalent, Office 2013 for Windows. This also allows Microsoft to better make its case for a subscription-based pricing model, something the company has been eager to get rolled out for some time, which is more competitive against the "perpetual" license model.
Office for Mac Home & Student will now run $140, while Office for Mac Home & Business--which throws in Outlook e-mail--steps up to $220, prices which are identical to its Office 2013 for Windows equivalents. With the elimination of multi-license packages, prices for those environments have also climbed to almost preposterous levels; three licenses of Home & Student formerly cost $150 thanks to the bundle, but now run $420. That takes the price up fully 180 percent, which is likely not a welcome proposition to buyers of Home & Student. But that's also part of the plan to make Microsoft's subscription model much more attractive by comparison.
The subscription version allows users to install Office 365 Home Premium for $100 annually, or $10 a month. But with that installation, users get what's called a "household license," which allows subscribers to install Office for Mac Home & Business on up to five systems. They can be all Macs, all Windows, or any combination of devices accordingly. For businesses, Office 365 Small Business Premium can be installed for $150 per user per year.
Basically, the price hike hit because, for the most part, buying the subscription plan actually would have been a waste of money for many users, unless those users installed their largest number of installs allowed under the terms of the license. However, those wanting in on the lower prices should still be able to find them for some time to come, as reports indicate that many retailers haven't made the move just yet.
It's easy to look at this overall picture and say that Microsoft's making a mistake here. After all, raising prices in the midst of a bad economy isn't exactly the way to go, unless of course, added value is included in the price hike. There's certainly something to be said about Microsoft's improved value in terms of multi-user environments, and of course, this is Microsoft software we're talking about here, some of the best of the breed. But with alternatives available for the single user, and businesses under pressure to maintain their profits in the midst of difficult times, Microsoft's price hike may ultimately backfire.
Only time will tell just what impact the price hike has on Microsoft's operations, but it certainly doesn't look good from the outset. In the long term, however, this may well be a good move for Microsoft and its new licensing setup.
Edited by Brooke Neuman