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One month after lifting the curtain on the updated version of its Office 365 subscription service for home users, Microsoft has officially launched the equivalent service for business customers with three new offers for small and midsized companies.

Microsoft debuted Office 365 in 2011 as a set of subscription-based, hosted versions of its business-oriented server products, including Exchange, SharePoint, and Lync, plus the Google Docs–defying Office Web Apps.

Don't call it Office 2013, though. Although that's essentially the version that customers will get, the technical name for the subscription-based version of the product is Office 365 Pro Plus.

The bundle includes the same nine applications as the retail version of Office 2013 Professional Plus – Word, Excel, PowerPoint, Outlook, OneNote, Access, Publisher, InfoPath, and Lync – but they're licensed differently and they use new installation and software update code based on Microsoft's application streaming technology.

Subscriptions for small and midsized businesses

All this will sound familiar to anyone who is aware of Office 365 Home Premium, the consumer-oriented version of Microsoft's subscription offering – and it should, because it's essentially the same idea. But as Office general manager Kirk Gregersen told El Reg, this new method of distributing Office has additional benefits for business IT managers.

"It changes the game for IT in terms of how they think about deploying and managing Office," Gregersen said in a phone interview.

For one thing, he said, installing Office using streaming is much easier and faster than previous methods, and it allows IT admins to configure software updates to be virtually automatic. Office 365 Pro Plus can also be installed alongside previous versions of Office, for cases where certain legacy applications or documents rely on an earlier version.

Gregersen also noted that Office 365 Pro Plus offers the benefit of being licensed per user, rather than per device – but we'll talk more about that shortly.

Details and pricing for the various flavors of Office 365 for businesses has slowly trickled out over the last six months or so, so Microsoft's Wednesday announcement offered few surprises on that front.

To recap, Office 365 Small Business Premium costs $150 per user per year (the equivalent of $12.50 per month) and is designed for organizations with 1–10 employees. Office 365 Midsized Business is for organizations with 10–250 employees and costs $180 per user per year ($15 per month).

In addition to Office 365 Pro Plus, the Small Business Premium and Midsized Business subscription tiers both offer the usual complement of online services, including Exchange-based email and cloud storage based on Microsoft's commercial-grade hosted infrastructure. (Office 365 Home Premium customers only get access to Outlook.com and SkyDrive, which are apparently not trustworthy enough for businesses.)

Office 365 Midsized Business also adds hosted SharePoint and Lync servers and Active Directory integration, with a web-based administration console – again, all stuff we knew about already.

In addition to the Small Business Premium and Midsized Business tiers, Gregersen said enterprise customers would also begin seeing the updated versions of the hosted Office 365 server components on Wednesday, and that there would be no pricing changes for those customers.

Don't want services? Microsoft says subscribe anyway

One thing we didn't realize, however, is that Microsoft is also offering Office 365 Pro Plus as a standalone subscription product. To rent the Office applications without any additional online services costs $144 per user per year, the equivalent of $12 per month.

Think about that for a moment. Why would you want to get your software that way, if you get no additional online perks and the applications cease to function once you stop paying your bill? The economics don't seem to make sense – until, that is, you consider what Gregersen mentioned earlier about the change in licensing.

As El Reg has reported earlier, all retail versions of Office 2013 are now licensed on a per-device basis. They are tied to a single PC, permanently. If the PC is lost or stolen or you upgrade to newer hardware, you must purchase a new copy of Office 2013 if you want to keep using it, according to Microsoft's new terms.

By comparison, the Office 365 Pro Plus license allows each user to install the applications on up to five devices (provided all five belong to the same user). Customers can also deactivate the suite on one device and install it on another, as often as they like, without limitation. According to Gregersen, that means users can even install the software on their home PCs, provided IT allows it.

"One of the big benefits of this model is that IT can enable a user to install it on any machine they want," Gregersen told El Reg, "and because of the way it's essentially streamed or deployed they don't have liability around licensing with this model."

Your Reg correspondent can't help but note, however, that this distinction as far as where and how often you can install Office is new as of Office 2013. Previous versions of Office allowed users to install the suite on two PCs at once, and the license was transferrable – buy a new PC and you could uninstall Office from the old one and activate it on the new one.

The Office 2013 licensing model is much more fragile. Imagine, if you will, that your house burns down. You'd like to rebuild it, but you're told that isn't possible; you can only buy a brand-new house. On the other hand, you're told, you could rent a new house – and then you'd get lots of free goodies, plus you'd never have to worry about your house burning down ever again. Might this not be a pretty good analogy for what Microsoft is offering? If so, it smells a little fishy.

Still, Gregersen says Microsoft is seeing good uptake on Office 365. Last year, one out of every seven of Redmond's enterprise customers were using some feature of Office 365, he says, and now that's up to one in five. In addition, paid signups among small and midsized businesses are up 150 per cent. Microsoft will hold a webcast to tout these and other success stories on Wednesday at 8am Pacific time.

Potential customers can find out more about the Office 365 bundles for businesses and sign up for a free trial at Microsoft's Office website. ®

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