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For the First Time, Microsoft Got More Revenue From Office 365 Subscriptions Than From Traditional Office Software Licensing (axios.com)

Ina Fried, reporting for Axios: Shares of Microsoft hit record territory in after-hours trading on Thursday, topping $75 a share, after the software giant's better-than-expected financial results. As has been the case for the last several quarters, strength in Microsoft's cloud business, including Office 365 and Windows Azure, was the key to the company's growth. Of note, Microsoft CFO Amy Hood told analysts that, for the first time, Microsoft got more revenue from Office 365 subscriptions than from traditional Office software licensing. Why it matters: Microsoft has shown an ability to grow its business even as the PC market has stalled, reflecting moves the company made in the cloud both since Satya Nadella took over as CEO as well as some that were in place before he took over the top spot.

9 of 250 comments (clear)

  1. Vendor lock-in stick by Tablizer · · Score: 4, Insightful

    Because they practically force MS-Cloud down your throat. They know you need MS-Office to be compatible with all your existing MS documents, yet you can't go to another vendor if you want reasonable desktop pricing.

    1. Re:Vendor lock-in stick by Anonymous Coward · · Score: 2, Insightful

      Well, look on the bright side; LibreOffice and such have been seeing massive increases in support and userbases in the past few years.
      I'm also seeing businesses trying out Ubuntu and such, and saying more positive things about it than Windows 10, which is horrible for Microsoft.
      The subscription and cloud shit is getting out of hand and businesses are starting to get fed up of seeing lists of 50 fucking names that they need to pay
      monthly or such for what should be trivial shit which happens to have non-subscription alternatives just waiting to be supported.
      It's the same as gamers, 2 multiplayer games on subscription ok, 3 tolerable, more than 3 = "get the fuck out, I ain't a charity company",
      yet over 50 individual titles except subscription payment with more and more saturating. The system is haywire.

  2. Re:No surprise there by cayenne8 · · Score: 5, Insightful

    Although it is an annual rent which is going to turn off a lot of people I now consider it a regular business related sense such as dry cleaning or a commute-capable car or for that matter taxes on income. If you want to be a grown up there are things you have to pay for.

    It is precisely THAT kind of thinking that is going to possibly eventually *doom* us all to perpetual, rental of software, rather than ownership (perpetual license if you're picky)...and that is NOT a good thing for consumers.

    Once the companies have you trapped in rental..they really have no incentive to improve and innovate now do they?

    We've seen it with Adobe's Creative Cloud rental system....you haven't seen any truly breakthrough improvements to date. Yes, they roll out some nice things here and there, but nothing that is earthshaking. I've certainly not found I miss anything by still using my CS6 apps I bought.

    And we've seen problems with Adobe CC...they will roll stuff out that breaks on peoples systems, and well....you're SOL till they can get an online fix out, meanwhile, you lose business.

    There are also people who've lost out by having their registration get lost in the system or broken, and again...they are SOL till customer service can help, and well, I think with most of these places we know the terms "customer service" and "help" are mutually exclusive terms.

    I can see it going this way with ANY software rental.

    The best way to avoid this is to pay with your wallet.

    --
    Light travels faster than sound. This is why some people appear bright until you hear them speak.........
  3. if you don't like it, *donate* to LibreOffice by Anonymous Coward · · Score: 5, Insightful

    If we want good, open, free alternatives, it helps a lot to donate to the projects.

    I donate to Debian, KDE, LibreOffice, GnuPG, and more.

    Even for OSS projects, being able to fund developers makes a big difference. Put your money where your mouth is. Stop giving money to Microsoft, start giving money to OSS. At least the latter will respect your rights (*) and not treat you as the enemy.

    (*) insert systemd joke here.

  4. Re:Absolutely baffling by MangoCats · · Score: 3, Insightful

    It is a lower pain threshold way of paying, but ultimately quite costly, especially compared to using FOSS.

  5. Re:Absolutely baffling by Dunbal · · Score: 3, Insightful

    The issue is that 98% of people who use office exchange documents with the other 2%.

    So logically it's the 98% that must adapt and keep up with the 2%, right? Something is wrong with the logic here. At some point the 2% need to realize that the tail doesn't wag the dog anymore.

    --
    Seven puppies were harmed during the making of this post.
  6. Re:Absolutely baffling by Dr.+Evil · · Score: 3, Insightful

    And FOSS hasn't replicated it with any success in 20 years.

  7. Re:Absolutely baffling by jurnyman · · Score: 1, Insightful

    Are we actually attempting to portray Office 365 as just the suite of traditional desktop apps in this thread? Wow. The revenue reported here includes exchange online, skype hours, sharepoint online, security products, rights management, enterprise clients, yammer, teams and ton of other things that aren't even remotely included in open office. Sure, these might not be things you see value in, but this isn't a situation where a bunch of stupid people at running out paying extra for something that you are getting for free.

  8. Re: No surprise there by jon3k · · Score: 4, Insightful
    The only reason this is being pushed is because it's getting harder and harder to convince people they need to upgrade Office. I'd argue that most people could get by with Office 2003 and almost guarantee they could get by with Office 2007 which was released over 10 years ago.

    and is equal or less in cost when amortized against one-off purchases of boxed software

    Maybe if you're upgrading every year? Which we all know is completely unnecessary. Office 2016 Home & Student is $149 and Office 365 Personal is $6.99/mo. That means if you keep your office version for two years, it is cheaper to buy a boxed copy than pay for a subscription. No one would argue you could easily use the same version of Office for TWICE that period of time.

    This is rent seeking, plain and simple. They're trying to structure it in such a way to increase your cost unnecessarily and force you to make purchases you wouldn't have otherwise needed.