Office for iPad is free, but it'll cost you

Office for iPad is free, but it'll cost you

Summary: More and more large software vendors (like Microsoft and Intuit) are making their iPad apps exclusive to subscribers of their SaaS offerings. I don't like subscription software and it's a troubling trend.

TOPICS: Apple, Cloud, iOS, iPad, Microsoft

Microsoft launched Office for iPad yesterday and the good news is that the new apps are free, but the bad news is that they're read-only runtimes unless you pony up for an Office 365 subscription. That Microsoft went subscription-only with its new iPad apps shouldn't come as a surprise, Office Mobile landed on the iPhone in June 2013 and it too required an Office 365 subscription.

The newest members of the venerable Office suite include three apps (Word, Excel, and PowerPoint) and our own Mary Jo Foley laid out what you get for free and what'll cost you. You can open Office documents for free, but creating and editing them requires a paid Office 365 subscription.

Office for iPad app is free; but it'll cost you - Jason O'Grady
(Chart: Microsoft)

Office 365 comes in a number of flavors: Business plans that include the iPad apps cost $12.50 to $15.00 per month and Home Premium (five desktops and five tablets) costs $9.99 per month. You can compare all the plans here. The least expensive mainstream option will be the just-announced Office 365 Personal plan, which costs $6.99 per month or $69.99 per year, but it won't be available until some time this spring. 

Educational users get a huge discount with Office 365 University, which costs $79.99 for four years (or $1.67 per month) for qualified individuals. Perhaps the best deal is one that our own James Kendrick discovered: starting tomorrow, Microsoft is offering free one-year Office 365 subscriptions to the first 50 iPad users that walk into a Microsoft Store (here's the store locator).

I'm not a fan of paying for software by the month and I'm even less of a fan of iOS apps that only work if you subscribe, and the new Office apps continue a troubling trend. Subscription software is one thing (Adobe opened the flood gates with Creative Cloud in 2012) but limiting the functionality of apps to subscribers is nothing more than a money grab.

Sure, Microsoft is a business with a responsibility to increase shareholder value, but would it have killed it to have, say, priced the apps at $10 each? That's what Apple did with Pages, Numbers and Keynote for iPad. (iWork are iLife are now free with the purchase of a new Mac or iOS device).

I realize that it's a matter of self-preservation for the software monoliths and that they're just trying to stay solvent by squeezing monthly fees out users for the privilege of licensing its wares, but it doesn't mean that I have to like it. It's especially off-putting to have to pay monthly for software that I might not even use every month. 

For Microsoft, it's all about business users, as Mary Jo Foley deftly points out. Rather than settle for a one-time $10 per app (like Apple does) Microsoft would rather "get recurring subscription revenues from iPad users who might need Microsoft Office—and nothing but Office—in order to insure full document fidelity at work." But the most sage part of Foley's analysis is that Microsoft wants to "get users hooked on other cloud services, like OneDrive cloud storage, the Windows Intune device-management service and Azure Active Directory Premium." I couldn't agree more. In fact, there's a bona fide possibility of Microsoft "halo effect" with 365.

Large companies aren't always early adopters when it comes to installing the latest version of software, many opt for a more conservative "wait for the first Service Pack" approach. So, how many enterprise customers have Office 365 licenses currently? Microsoft says over 15 percent of the Exchange installed base is now on Office 365, but that's only the mail side, which is available on all Office 365 subscriptions. Subscriptions that include desktop and iPad versions are more expensive.

A generous estimate is that 7-8 percent of the installed base subscribes to Office 365. Which is exactly my point: Satya Nadella was serious when he called Office for iPad "the intersection of cloud and mobile." He's trying to lure more Microsoft customers onto its subscription platform and he's using Office for iPad as an incentive. Is this a harbinger of things to come? Will Microsoft move exclusively to a SaaS licensing model? Not in the near future (Microsoft's not as nimble—or as crazy—as Adobe) but the handwriting is on the wall.

What's your take on tablet apps that require a subscription? 

Topics: Apple, Cloud, iOS, iPad, Microsoft

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • I hate subscriptions too...

    I like to OWN things. I'd even pay MORE to own it. Then I can use it when I want, the way I want, for as long as I want. This applies to software, music, etc.

    Even so... the subscription model seems to be gaining steam. I think it makes sense for the enterprise... but for consumers, I think the subscription model for software seems odd. I guess we'll see if it sticks.
    • Generally

      I prefer to buy things, but with the upfront prices of some software, like Adobe CS6 coming in at over $4,500 over here in Germany, renting is a much sounder model, especially if I don't know if I will be using it intensively every month.

      For short term projects, it is a real bargain.
    • It's actually not too bad of a deal if you have

      A family and multiple PCs who all want to have office on them. For a single person with only 1 computer it isn't a very good deal though. I'd definitely prefer to own the software, but if the subscription prices are reasonable I can handle that too.
      Sam Wagner
    • I never liked the idea much either but, when you are talking about ...

      ... $99 per year for five PC's compared to $499 for ONE PC to get the entire Office Suite, that makes it look a whole lot better.
      M Wagner
    • You dont own it

      Even if you buy it, and you certainly can't use it "the way you want", i.e. you can put it on ONE device for 2-400 dollars depending on version... or you can spend $99 a year and put it on 5 devices and get instant updates and upgrades for as long as you have a sub. For the 3 devices I use it on, it's cheaper than "buying it and "owning" it".
  • I want to BUY the software, not rent it.

    I detest monthly payments and have a habit of paying off loans at 2x to 3x faster than the standard term.
    • if monthly payments are not for you pay annually

      if monthly payments are not for you pay annually since they let you change devices in the plan.
    • Then pay by the year.

      It's cheaper, and easier.
    • I agree

      I installed Corel Office on my new laptop last month (Feb.2014).
    • I accidently hit the flag button.

      I accidently hit the flag button.
  • I spent 3 years an ipad owner waiting for office...

    And in 24 hours I'm reaching news saturation... Could zdnet not have some kind of chief editor that stops all this doubling up of stories? It's almost as bad as an apple launch.

    In my experience of MS, office 365 isn't expensive at all relative to office. Office has always been one of those things you just have to pay for like anti malware software and they've always been very keen to cash in on that fact. (Outlook) In reality i only need the features that came with my office 95 disks. But i've had to buy a whole host of them over the years.

    Now if you only have one machine an individual license is cheaper. But if you do have an ipad an iphone a laptop a desktop, your wife has all of the above and your kid has a laptop this makes it all about the same price as office family and the mobile devices are free in this scenario. You also dont have to drop £300 every 3/4 years, just pay monthly.

    In the long run MS had to do something; office was so over priced that piracy had become the norm for a very high percentage. Who knows if everyone pays we may one say see a reflection of that saving. I wont hold my breath, but its possible.
    • Is it?

      All the reviews I have read, and personal experience, tells me that the annual cost will be much higher than purchased applications. Certainly, for private individuals the use of Office has just become a huge luxury; for SME's it has just become a serious expense (relatively), and large organisations and government I suspect will be paying considerably more each year. We are now looking at restricting individuals to only the apps they use daily - occasional use is too expensive now I suspect.
      I think that Ms and Google are about to rape the world. It's only clever marketing that is telling you all that this is a good idea.
      Oh, and please forget the issues of security and the problems of inadequate connectivity...
      • No, it's math.

        As i said, if you are the sole user on one device, office 365 isn't worth it.

        If you have to buy a family pack AND you want it on your mobile and tablets it is worth it.

        Its really simple math.

        I did state quite clearly that i think office as a whole is overpriced and that there have been precious new features I've made use of in 19 years.

        I'm a linux guy, I mostly use focus writer and abiword, but until the existing status quo changes, MS office is just a tax you have to pay for many of us.
        • Does anyone really need a family pack?

          Does a family really need to have office installed on all of their computers?
          • If they don't

            I'd advise they get chromebooks n save a load.

            My wife needs it to open work emails and it's actually a requirement of my son's education course - office, even what font and formatting he should use. So we do. Others probably not... Do they need a laptop instead of an ipad?
          • they can just use Windows Rt to get it for free

            they can just use Windows RT to get it for free and also free in browser with and on mobile. Its the only ipad that needs subscription and i think they gonna reduce the price next year and so on. All software/hardware is pricey when it launched.
          • mine does

            I did not think I liked software subscription, but 365 has worked out really well, the software will always be up to date, the OneDrive integration is excellent and I have access to Office and my files anywhere where there is internet access, 10 bucks a month is well worth it. As an added bonus, I am very happy that my kids have access to Office and their own 25 gig of cloud storage each when they're away from me, and there are 60 Skype minutes a month which I use at times for overseas calls.
          • Ask my wife who was always trying to wrench the laptop away ...

            ... from our teenager - or me when I need access to my high-end Core i7 desktop. Or me when I want to use my Surface to do work while I am watching TV.

            "Need" and "want" are two different things. We all decide if we are going to pay the asking price of sit around and complain when we want something for which we are unwilling to pay. ALL VENDORS charge what the market will bear.
            M Wagner
      • Price

        Office is generally on a three year upgrade cycle. Take the annual cost and multiply by three and I get $210 per version, which is clearly more than the student edition, but not crazily more and we understand monthly payments when it comes to a lease or financing.

        The differences: we don't own or have option to buy and I don't think I've met any small business owner who licensed every version of Office for every employee. I've met people who'd still use Office 97, if they could.

        The scary part comes with cutoff of access to one's files were one to decide it wasn't the value promised. That might occur if something else becomes better or Microsoft doesn't address bugs and frictions on a timely, frequent basis. I make no predictions here and I cannot anticipate what compromises someone else may accept.

        Seems to me that if Office is a key work tool for a BYOD workplace, the employer would reimburse the subscription and the employee would be wise to not use it for personal documents.

        At this time, I'm going to pass on the free version, but if it was key to my hobbies or work, $10 a month is not outrageous. How wealthy Microsoft becomes for giving people something they want and use is not one of my problems.
    • What on earth do you use 5 PERSONAL copies of office for?

      It's clearly nothing to do with any business, otherwise you should have business editions.
      After a heavy day at the office you want to get home and have a play with pivot tables??