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Licensing issues fuel Office 365 vs. Office 2013 debate

Microsoft offers a lot to enterprises with Office 2013 features, but drawbacks such as complex licensing rules may give Office 365 an edge.

Despite positive reviews of some of its features, licensing for Office 2013 continues give many businesses a headache. Some organizations may move to the subscription-based Office 365, while others will stay on Office 2013 because of their Enterprise Agreements.

Microsoft does not make it easy to bridge the gap between the end of an Enterprise Agreement (EA) license and the starting point for a move to Office 365, said Imran Shaikh, IT program director at Vista Equity Partners in San Francisco. Nor does the Office 365 vs. Office 2013 debate make it easy to simply continue to the end of an EA, he said.

"The main win with Office 2013 is that it is a perpetual license," said Wes Miller, an analyst at Directions on Microsoft, an IT consultancy in Kirkland, Washington. Conversely, Office 365's annual licensing fee provides end users with constant updates and the ability to install the software on up to five devices.

However, insight into how much an end user actually works with a particular application in Office could help administrators make some strategic decisions on whether to stay on premises with Office 2013 or move to the cloud.

A license management tool made by SoftWatch Technologies Ltd., an Israeli startup, can track how much workers do with any app. The Windows-based product can measure user interactivity with software, including Word, Excel or PowerPoint.

Admins can then analyze the data and decide whether a company should license a product like Office 2013 or move to a cloud-based productivity tool to potentially reduce costs.

The product shows businesses how much is spent on licensing versus what employees actually use, said Moshe Kozlovski, co-CEO of SoftWatch.

Some organizations want to move away from Office 2013 licensing and embrace Office 365's subscription model, especially when it includes more application installs per user.

Jamison West, CEO of IT service provider Arterian, said that some of his clients examined the cost and chose to pay the per-user monthly fee for that reason alone. "This can justify the cost of being on Office 365," he said.

In addition, anecdotes of end users curious about using the Office for iPad productivity suite and its connection with Office 365 are cropping up. West said a law firm recently contacted him about licensing Office 365 because the lawyers all use iPads, and having the Office suite available on devices was attractive for them.

"They were on Exchange 2010 and looking to do the migration, and [they wanted to] move to Office 365," West said.

Organizations note Office 2013 collaboration absence

Office 2013 provides features that are a staple for many businesses, but IT shops need to compare Office 2013 vs. Office 365's additional functionality for SharePoint Online, OneDrive and Lync.

Indeed, Microsoft is bullish on the idea of groups that cross a variety of products to boost worker collaboration.

"Groups [are] the DNA that stretches across the Office 365 suite, allowing different sets of users to work more closely together," said Steven Chew, Microsoft technical product manager for Exchange. "At the user level, you have Office 365 and groups. Under the covers, we have an intelligence layer called Office Graph, which takes signals from Exchange and SharePoint and surfaces it up to groups."

Senior executive editor Ed Scannell contributed to this article.

This was first published in August 2014

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