Microsoft Office returns to subscription pricing with Office 365

I’m not sure if it was a coincident or not but if you’ve followed Microsoft Office’s development for long enough, you’d know that a decade ago Microsoft first tested the waters of pay-as-you-go licensing with Office XP, which Office 365 is reviving today.

The way it worked back then was it entitled you to free major version upgrades should they be released during your subscription period, as long as you keep your subscription active. Whilst it was more expensive and restrictive than a perpetual (normal) license, in the end it was the cheapest option when Microsoft ended the licensing scheme shortly after introduction and offered subscribers perpetual licenses at no extra cost. In effect, subscribers, whose accounts were closed within the first year, only paid around one-third half the price for the perpetual license.

What’s different today with Office 365 is that only midsize and large businesses can get subscription pricing. Back then anyone could go into a store and buy a boxed copy of Office XP Subscription. Office 365 only offers Office 2010 Professional Plus, the top-end version. In 2001, Office XP Standard and Office XP Professional were offered.

Prices were comparable between the two. Office 2010’s subscription cost is nearly half that of Office XP. If memory serves me correctly, Office XP Professional (one year) Subscription was selling here down under for around $200 $359, or $16.67 29.92/month. Office 365’s Office 2010 Professional Plus is now selling for $15/month, but that’s only if you also buy the rest of Office 365’s services.

And one more thing. Office XP Subscription was tied to the machine you activate it on, like how Microsoft OEM products work. I would expect Office 365’s licenses to be portable.

In the end, I think Office XP was the better offering in terms of availability and price. Now, whether we will see a repeat of the perpetual license deal, well, only time can tell.

P.S. I remember I was so expecting Windows XP to come in a subscription flavor, but no.

Update: new prices from Availability.