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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.
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.
Table-ized A.I.
98% of the people who use office simply type letters and notes, maybe make a simple spreadsheet or two. Openoffice is entirely up to the task.
I really have to give Microsoft credit, figuring out a way to make people pay rent on something as simple as a word processor.
Weaselmancer
rediculous.
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.........
We switched to Office365 this month from 2010, and our end users are sick of it. They complain about re-authentication, along with bugs and other issues. Many people are switching back to our Google webmail instead.
For us, the price point is higher than where we want to be, given all the SaaS crap we are stuck with. I expect a defection inside a year.
Okay. I bought a retail boxed copy of Office 2010 Home some years ago. Let's say 2012, since otherwise it would be Office 2013. It specifically allows me to install it on multiple computers (three to five, I can't remember; I only have it one two). I don't remember exactly what I paid anymore, but let's pretend it was $150 (that's what a standalone copy costs now). That means I've had use of this software for five years at an amortized cost of $30/year. That cost per year continues going down every year that I still use 2010--and I will, because at the moment, I don't perceive that there have been any great advances in word processing technology in the last 7 years. The cost of Office 365 Home is $100 per year. That really doesn't sound like a better deal to me.
And if you want to be a smart grown up, you don't pay more for things than you need to, especially by paying over and over again for things you can just pay for once.
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.
If you work in the business world you inevitably have to deal with MS Word documents and MS Excel spreadsheets and MS Powerpoint sludge.
This is a lot less true than it used to be. None of the day-to-day data that I deal with has been in any of those formats for a long time.
The sad thing is, it still only needs one or two exceptions -- say, exporting a spreadsheet to send to your accountant or a contract for review and markup by your lawyers -- to make it worth the cost of buying MS rather than risking data loss in translation. Fortunately, for us it's only things like legal/finance work where any avoidable risk is highly undesirable because of the potential costs of even small errors, which also means it's only MS Office where this applies. Keeping around the odd pre-365 copy we already bought is sufficient here.
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.
From a business point of view, what it costs is just a business expense and is either worth it or it isn't.
The bigger reason we won't rent software for anything truly essential to our business operations is that it can be changed, made more expensive, or even entirely turned off, at any time, according to nothing but the whims of the software developer. Given the track record of the software industry collectively and of some of these big name developers in particular for shipping updates that their customers don't actually want, interrupting functionality due to downtime, or even discontinuing entire product lines that are no longer strategically convenient, that's far too much risk for business to take with anything that actually matters, IMHO.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
you actually never owned the s/w - it's always been a rental - just look at the agreements in any EULA...all we've done is go to a monthly recurring model
nothing to see here - move along
Here is how you make revenue for Office365 go up - change your pricing.
I would venture that most of this comes from companies. They simply bundle the two together, of course requiring that you buy both. Maybe your costs are the same, or maybe they go up a little, but the ratio is probably heavily weighted towards office365. Microsoft can then say the revenue for 365 goes up, traditional license revenue goes down. But you still have to have both. Maybe they can push just 365 on new clients, but i think that would be a hard sell.
Then once their subscription numbers are up, they can just let the client-version wither and die.
At work we have Office365, but everyone I know uses the traditional installed version. It is buggier than it used to be, because it has to phone-home to mothership365. Store docs to OneDrive, view them in the cloud (which I never really do), or log in and use the 365 calendar/outlook, which I try to avoid at all costs. Many many times Office applications will hang now that they are 'integrated' with 365.
Nobody will care about 365 until they take away the client version, then productivity will tank. By that time though, the frog will be boiled.
My beliefs do not require that you agree with them.
The move to Office 365 was entirely predictable as Office 365 is simply the next version of Office.
Any medium to large size enterprise that was using Office was already "renting" their software from Microsoft in the form of Software Assurance. Many businesses have become accustomed to annual license/support fees - from networking, to backup to productivity software - almost all of it in production in a decent size enterprise requires annual licensing and support.
Most enterprises that I've seen deploy Office 365 are deploying local copies of Office 2016 and taking great pains to prevent storage of their data in Microsoft's cloud.
This isn't some new paradigm shift to cloud/rental software - it's already been here for many years.
I ended up converting last year and it is actually a better deal all around. If you work in the business world you inevitably have to deal with MS Word documents and MS Excel spreadsheets and MS Powerpoint sludge.
No it isn't. It's just stupid. You can buy Office 2010 on ebay for what... $60 and own it forever. This is substantially less than one year rental cost of Office 365.
What of any meaningful value does Office 2010 not do that your 365 subscription can?
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.
If you want to be a grown up you have to be able to do basic math. Paying more over time isn't smart or intelligent. It doesn't make you a grown up. It doesn't improve cash flow. It is simply throwing money away for no reason.
Guess what the first thing that will be canceled when the economy goes sour. Car payment or Office 365 payment?
Once the companies have you trapped in rental..they really have no incentive to improve and innovate now do they?
I dislike it so much, that I think there should be a law against it. Something liek....
SQUATTERS RIGHTS ON SOFTWARE
If software or the right to the legal possession of software is included as a product or service, then after a consumer's use of that service and/or legal possession of that copy of software has continued for 12 calendar months without permanent cancellation or termination of the consumer's privilege to use the software, then after the 12th month, that consumer receives a permanent, unconditional, irrevocable right to continue use of all their copies of software, to disable, circumvent, or otherwise modify or duplicate any security or other features of any aspect of their copy of software in any manner required to make software continue to function, and/or transfer or convey their rights to one or all copies of their software without restriction, notwithstanding any agreement to the contrary.
I explicitly convert everything down to a common standard.
Last time a legal department sent me a Signed PDF which wanted to open some JavaScript and talk to Adobe servers and then I should create an account with Adobe while Adobe held onto my public/private key for signing.
I opened the PDF in a non-Adobe product, saved and signed it with a copy of my real signature (which the app happily took from the camera), sent it back. It thoroughly broke their automatic processing but they went on with it (insert Johnny Tables reference here) because nobody at the office understood why it wasn't working (it looked like I signed it after all).
Custom electronics and digital signage for your business: www.evcircuits.com
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.
is what makes Office so successful. It states that 80% of your users only use 20% of your application's functionality, but for each user it's a _slightly_ different 20%.
Basically, everybody has that one cool feature they can't live without that their entire workflow is dependent on (spacebar heating anyone?). That's how Microsoft gets lock in. You can't leave without taking a major hit.
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What happens if you miss a payment or stop all-together? Does the program stop working? I'm guessing the cloud storage might stop allowing new files but who knows