Microsoft Office 365 and its “Household” Discount Strategy

Microsoft Office 365, a less expensive subscription-based substitute to the retail packages of Microsoft Office, may offer more discounts – and that’s as long as Microsoft does not close up a crucial loophole in its marketing strategy.

Only one fee is charged per household for use of Office 365’s package. What is ambiguous is how Microsoft defines a “household.” Each license for Office 365 covers up to five devices. However, it is not clear if a “household” refers to a single IP or if it can be extended to family members who may leave the home.

“I don’t believe any one has asked me that question before,” said Oliver Roll, a general manager at Microsoft, when asked by ReadWrite to explain the confines of a “household” covered by a Microsoft Office 365 license.

Consumer rate for Microsoft Office 365 is $99.99 per year or $8.34 per month. This includes Word, Excel, Access, OneNote, Outlook, PowerPoint, Publisher, 60 minutes of Skype calling, and additional storage for SkyDrive. For the Office 365 University bundle, students would be charged $79.99 for four years. That includes a pair of licenses for use on either a notebook PC or a Surface Pro. The University package also allows one student to split the cost of the license with another student. On February 27, Microsoft’s business customers will get access to Office 365.

Traditional packages of Office, with versions that can be licensed by a Mac or a PC, include Home & Student ($139.99) and Home & Business ($219.99). Professional ($399.99) is exclusive to PCs only.

The actual benefits received by a household subscribing to Office 365 vary depending on the number of devices present in the house, as well as other factors.

However, even without knowing whether or not the consumer license for Office 365 is geographically tied, the price point still affords flexibility. Consider this scenario: a family splits a $99.99-per-year copy of Office 365 among five PCs. One copy is installed on a computer that a student takes with him to the university. At $20 per PC multiplied by four years, it is equivalent to buying the University bundle.

When it comes to the licensing policy, it is up to Microsoft to strictly enforce it (or not).

Sharing can be inherently advantageous to Microsoft. Consider, for instance, the case of HBO providing three accounts per subscriber and not having any qualms about subscribers sharing those three usernames and passwords. “In private, HBO executives did not dispute the notion that the password borrowing could lead young people to subscribe to HBO in the future,” reported The New York Times.

Microsoft Office 365, unlike Google, is not wholly based in the cloud. Users can download copies to their PCs then use them offline. Moreover, upgrades and patching are set to occur automatically and additional features will be introduced more frequently than before.

Microsoft touts that enterprises liked Office 365, claiming that 20 percent of businesses using Office had ended up subscribing to Office 365. Microsoft saw an increase of 150 percent among small and mid-sized companies.

The boost to Microsoft can be partly attributed to Google’s axing of its Google Apps free version from the enterprise portfolio. In early 2013, the U.S. Department of Defense and the Chicago office began to use Office, as well as other Microsoft products. The Catholic International Education Office, with its 2.5 million students in 103 countries, also signed on to Office 365.

Office 365 comes with a marketplace called Office Store, which sells add-ons, plug-ins, dictionaries, and companies such as Gliffy. Gliffy, in particular, competes with Microsoft products but is invited nonetheless in the Office Store. (KOM) Link. Link.