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Microsoft Reports New Subscribers For Office 365 Plunged 62% (itworld.com)
An anonymous reader writes:
Microsoft is having trouble selling $7-a-month subscriptions to Office 365. In the last three months of 2016, Microsoft added just 900,000 new subscriptions -- and throughout all of 2016, subscriptions increased by just 4.3 million. In fact, a chart at IT World shows that new subscriptions actually peaked in a year ago, with a steady decline in new subscribers ever since. "In each of the last three quarters, Office 365 grew by about 900,000 subscribers, the smallest quarterly increase since early 2014," they write. "Prior to the nine-month stretch of 2016, subscribers were accumulating at rates two to three times larger per quarter."
This explains why Microsoft announced 97 new markets for the software nine weeks ago. So far after four years, Microsoft's found just 25 million subscribers for Office 365 -- and it's not clear how many of those came from their $100 five-user packages. (Although those figures suggest that Office 365 subscriptions are still earning Microsoft at least half a billion dollars a year.)
This explains why Microsoft announced 97 new markets for the software nine weeks ago. So far after four years, Microsoft's found just 25 million subscribers for Office 365 -- and it's not clear how many of those came from their $100 five-user packages. (Although those figures suggest that Office 365 subscriptions are still earning Microsoft at least half a billion dollars a year.)
Do they? How's Adobe doing with their cloud app subscriptions?
We're getting our 50 users off it. With the non-stop "Service" messages and the intrusive bullshit it keeps trying to push it has turned into a sinkhole.
For example, Outlook users get prompted to install a NFL calendar add-on to follow football season. When I called support they first told me it must be a malware we picked up somewhere. After getting even more irate they told me "oh, well, yes, we do push that and you can't turn those messages off".
Utter bullshit.
> Microsoft STILL hasn't figured out that most people prefer to own something than rent something.
For many years, I sold some software to small businesses (people smart enough to successfully run their own business). We sold the software for $149 or $189. Our competitor rented theirs for $59/month. This is software that businesses would use for years, so the comparison was:
$149 to buy it and use it for three years
$2,124 to rent it for three years
We had MANY potential customers choose the "cheaper" competitor even though we loudly explained the huge price difference on our web site amd anywhere pricing was mentioned. Potential customers asked us for a monthly option. Eventually we relented and offered the choice, while clearly telling new customers that buying costs a whole lot less. A lot of people chose the monthly option.
Once in a while, when I noticed somebody had been paying for four years or something, meaning they had paid five or ten times the purchase price, I just cancelled their billing.
I wonder how many of these "subscriptions" are effectively free, given away by MS to students because their educational institute has a licence, and its not just the student , its staff as well who are able to get a free subscription and install it on 5 machines they own. I think there is a VERY big gap between total number of subscription and ones that Microsoft actually make any income from.
I GLADLY pay 9 bucks a month for photoshop/LR All updates come automatically, never had a problem with it, and they usually come up with a new version every year on the old stand alone model, and the update was more expensive than the subscription.
Almost any other subscription service with those kind of numbers would be considered a runaway success. Even World of Warcraft, at its peak, had a fraction of that.
SJW: Someone who has run out of real oppression, and has to fake it.
To put it politely, it's wishful thinking to claim that Office competitors like iWork, LibreOffice, and Google Docs have significantly impacted MS Office's market share.
We switched from Microsoft Office to Open Office about 5 years ago and since that time as computers have been replaced, office has not been purchased for them. 5 years ago it was also common to occasionally have someone send you a .doc file. I haven't had someone do that in several years. I can't even remember the last time I received a document that I couldn't open in Open Office. About that same time we also switched from Outlook to google mail handling all out corporate email and again, we haven't missed it.
The MS Office hegemony is still strong and is still making MS a lot of money.
May be true in the good ol' US of A but over in the EU, they're going full-steam ahead with switching from Microsoft Windows and Office to Ubuntu and LibreOffice (There's a draft directive to switch to free and open source IT solutions). Since governments and govt. agencies are Microsoft's main paying customers, then Microsoft are going downhill in a very large market. It's just a matter of how long it takes for the EU to drop Microsoft entirely.
Need LibreOffice online? LibreOffice 3.5 can be installed on a server and will work in a web browser. Need a supported commercial solution? Check out Collabora and the many spin-off service providers.
Yes OO and LO are definitely viable replacements for Office for many people. And I can believe they are making inroads, particularly in small businesses. But I have not seen any evidence that alternatives are making a dent in the overall Office hegemony, despite your anecdote. Sorry. Large organizations still use Office and Exchange for a lot of things. MS Office is going to be with us in its various forms for a long time, I'm afraid. In many large organizations it's just part of the annual MS site license that they pay the big bucks for.
You bring up some interesting points.
Some customers were very clear that they felt like $59/month was a better / lower price than $149 or $189 to purchase. It wasn't about support, it was purely short-term thinking in those cases.
Support costs became an issue for us, for the company, because we still had to provide some support for sales we had made years ago. The longer we stayed in business, the higher our costs went, even if sales didn't increase. We cured that with a two step solution. First, we began offering extended support for $99/year after the first year. The first year was included in the purchase price, after that it was optional. That gave out customers the freedom to make a one-time purchase, or to choose multi-year support, at their option. For us, it means today we're not responsible for providing support indefinitely in sales from five years ago. For a couple of months it was an opt-in option you could add, then we switched it to opt-out, with support included by default. Then we changed the language to call it "Standard: with support and Barebones: no support after 12 months".
As it turned out, with the extended support option, most of the people who demanded a lot of support were people who had chosen the discounted "no support" option. Customers got upset when we told them "you actively chose the unsupported version. Would you like to sign up for support now, 12 months for $99?" I'd prefer to give customers choices, but not if it makes them angry. We moved to $99 / year support as the only option and stopped offering a choice for only 12 months initial support.
If I ever do something like that again, an annual fee will be mandatory, unless it's a $1 app that obviously doesn't include much support.