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New Microsoft Office Takes to the Cloud: Rich Jaroslovsky

It’ll take more than an Excel spreadsheet to help you figure out the latest version of Microsoft (MSFT) Office. Maybe a degree from the London School of Economics.

It’s been awhile since a new version of Office stirred a lot of excitement. So much has already been built into the world’s most popular productivity suite over the years that it’s hard to get too worked up over new features. Threaded comments in Word! Recommended PivotTables in Excel!

Still, the new Office is worth paying attention to for a couple of reasons. It’s the first one designed for use in the era of cloud-connected devices, touchscreens and tablets. And Microsoft is radically changing how it’s priced and sold to consumers.

The cloud -- in this case, Microsoft’s Office.com website and SkyDrive service -- is integral to the new offering.

Facing a threat from Google (GOOG)’s online suite of productivity applications, Microsoft has adopted a hybrid model. Unlike the Google Docs approach, major Office components are still installed locally on your computer, giving you full access and flexibility even when you are offline.

If you’re signed into Office.com, your files, formatting and preferred settings will be seamlessly saved to SkyDrive, giving you access to your work even if you’re signing in from another computer -- or a Windows Phone, for that matter. If you’re not online, changes you make locally to a file will be automatically synced the next time you connect.

Photographer: David Paul Morris/Bloomberg

If you’re signed into Office.com, your files, formatting and preferred settings will be seamlessly saved to SkyDrive, giving you access to your work even if you’re signing in from another computer -- or a Windows Phone, for that matter. Close

If you’re signed into Office.com, your files, formatting and preferred settings will be... Read More

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Photographer: David Paul Morris/Bloomberg

If you’re signed into Office.com, your files, formatting and preferred settings will be seamlessly saved to SkyDrive, giving you access to your work even if you’re signing in from another computer -- or a Windows Phone, for that matter.

Touch-Friendlier

New features are designed to make Office friendlier to users of tablets and touchscreens. For example, a toolbar option lets you space icons farther apart to make them easier to poke with a finger.

One option I found particularly appealing on a touchscreen tablet display is Word’s new Read mode that automatically reflows text. And OneNote lets you draw or write on screen using a finger or stylus and gives you a full-screen view in the new Windows 8 style.

The biggest change to Office, though, is in how it’s sold. Microsoft wants you to think of it not as a product you purchase once every several years, but as a service you subscribe to and pay for every year, called Office 365 Home Premium.

Blurred Line

The concept is in keeping with the times, where the line between software and services is increasingly blurred. But it can make the process of figuring out what’s best for you almost insanely complicated.

OK, stay with me now.

A subscription to Office 365 will cost $100 a year. For that, PC users will get the full complement of Office programs: Word, PowerPoint, Excel, Outlook, OneNote, Access and Publisher.

You may install them on up to five computers, so one subscription can take care of an entire family. You also get access to Web-based versions of the programs, in case you’re working on someone else’s computer, and 27 gigabytes of SkyDrive storage, rather than the seven gigabytes Microsoft gives away for free.

Plus 60 minutes of worldwide phone time per month via Skype. Plus, if there’s an Apple (AAPL) user in the family, he or she can get the Mac version of Office on the same subscription.

Whew! Sounds like quite a deal, and it may be -- if you need all that. But many may find it overkill. How often does Junior really need to create a relational database in Access for his homework?

One-Time Purchase

For most consumers, the alternative will be a one-time-only payment of $140 for a version called Office Home & Student, which includes Word, Excel, PowerPoint and OneNote. For the previous version of Office, that one-time purchase bought you the right to install it on three computers. But for the 2013 edition, Microsoft has reduced it to one.

So to figure out the best deal for yourself, you have to take into account how many computers you have, how many of the Office component programs you’re likely to use, whether and how much you want to use the cloud for storage, and how often you call overseas -- just for starters.

And, of course, how you feel about committing yourself to pay $100 a year, every year, or else see your Office files degraded to a read-only form you can continue to access, but not edit.

I foresee consumers the world over logging on to Microsoft’s online store, or standing slack-jawed in their neighborhood Staples (SPLS) or Best Buy (BBY), trying to sort everything out.

Or maybe building a database in Access to keep track of all the variables.

(Rich Jaroslovsky is a Bloomberg News columnist. The opinions expressed are his own.)

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To contact the reporter on this story: Rich Jaroslovsky in San Francisco at rjaroslovsky@bloomberg.net. Follow on Twitter @RichJaro.

To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.

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