Microsoft Office 365 Home Premium: 3.5 million subscribers

Microsoft is continuing to grab consumer customers for its Office subscription business at a rapid clip.
Written by Mary Jo Foley, Senior Contributing Editor

Microsoft's Office 365 Home Premium subscription business is continuing to grow steadily, and is now at more than 3.5 million subscribers.


The latest tally was reported by Microsoft as part of its second quarter fiscal 2014 numbers.

In October 2013, Microsoft officials said there were more than 2 million Office 365 Home Premium subscribers, up from 1 million in May of last year.

Office 365 Home Premium revenues are reported through Microsoft's "Devices & Consumers Other" category under its new reporting structure; the rest of Office 365 reports into a different segment, the "Devices and Services Licensing." (Here's my feeble attempt to explain Microsoft's new reporting structure.)

Microsoft officials conceded that strong Office 365 Home Premium sales are impacting its Office Consumer business. Office Consumer revenues were down 16 percentage points this quarter "due to the shift to Office 365 Home Premium," officials said.

Microsoft officials also noted that Azure seats, like Office 365 ones, grew "triple digits." Microsoft didn't provide Azure subscriber numbers as part of its earnings materials.

Office 365 Home Premium is a subscription version of Microsoft's Office client software. It is key to the company's mission to reinvent itself as a devices and sevices, rather than a pure software company.

The company launched Office 365 Home Premium on January 29. For $99.99 per year, Office 365 Home Premium allows users to install Office client apps on up to five PCs and/or Macs in total. Users who subscribe rather than buy the single-use Office 2013 complement outright, also are supposed to receive regular feature updates and synchronization capabilities by signing in through Office.com.

Microsoft Office 365, as a whole, is operating at a $1.5 billion annual run rate, officials said earlier this summer. In April this year, Office 365 was at a $1 billion run rate.

On the devices side of the house, Microsoft officials said Surface revenues reached $893 million for the quarter, up from $400 million the previous quarter. Overall, the company reported second quarter earnings of $6.56 billion, or 78 cents a share, on revenue of $24.52 billion. Non-GAAP earnings for the second quarter excluding various revenue deferrals were 81 cents a share.

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