IT shops may skip Office 2013 upgrade in favor of Office in the cloud

Microsoft will release Office 2013 within the next two months, but few customers will upgrade. Other may use cloud-based productivity suites instead.

Office 2013 will be generally available within the next two months, but many Microsoft customers continue to use legacy versions of Office and are in no rush to upgrade to Office 2013.

Some companies may even switch to cloud-based productivity suites instead.

Microsoft delivered a raft of new or updated IT products during the second half of 2012, including Windows 8 and Windows RT. Microsoft Office 2013 became available to volume purchasers in early December and will be generally available in January or February.

The delayed release doesn't matter much, as many IT pros use much earlier versions of Office and have no intention of upgrading any time soon.

"I'm actually glad [the release] is pushed back a bit to give me time to test it out," said Scott Frazier, IT administrator at Con. J. Franke Electric, an electrical contractor in Stockton, Calif.

Like many organizations, the company, which runs Office 2007 -- two versions older than Office 2013 -- will upgrade when it needs a software refresh, he added.

Meanwhile, older versions of Office remain popular.

"A lot of my customers have just finished moving to Office 2010," said Paul DeGroot, principal consultant at Pica Communications LLC, a Windows licensing consultancy in Camano Island, Wash. DeGroot said he doesn't envision a mad scramble when the Office 2013 upgrade release reaches GA.

One of the biggest reasons that customers delay upgrades is cost, said Wes Miller, research vice president for applications at analyst firm Directions on Microsoft in Kirkland, Wash. Upgrades are also time-consuming.

"Any business that just finished a migration to Office 2010, doesn't want to do that again anytime soon," Miller said.

Cloud-based productivity suites may trump Office 2013

While Microsoft promotes Office 2013, the company would in fact prefer to migrate customers to a subscription-based version of Office in the cloud, and it has included some attractive add-ons.

For instance, some versions of Office 365 let IT pros run Office Professional Plus 2013 as a subscription that includes the standard desktop productivity suite, along with cloud server applications such as Exchange, SharePoint Server and Lync unified communications.

At the same time, Microsoft is trying not to turn off customers that prefer the on-premises releases of Office 2013.

It boils down to whether the customer wants to make perpetual payments -- an ongoing subscription pricing model where updates are provided via the cloud whenever they're ready -- or perpetual licenses, where the customer pays only once, but doesn't receive the updates.

Microsoft also wants to avoid encroachment on its Office application suite franchise from competitors such as Google Docs and IBM SmartCloud.

Google Docs provides streamlined, Web-hosted word processing, spreadsheet, presentation and email applications along the lines of basic Office 365 offerings. In addition, IBM in December released its own SmartCloud Docs cloud-based productivity application competitor.

Meanwhile, Microsoft needs to avoid the perception that Office 2013 is late so as not to present an opening for competitors.

The apparent lateness of the new version, however, may be more of a strategy than a case of bad planning, said Aamir Shah, senior cloud business manager at En Pointe Technologies Inc., an IT services provider in Los Angeles.

For example, Microsoft released Windows 7 in October 2009 and followed that up with the release of Office 2010 the following May, about the time that some early-bird corporate IT shops were getting Windows 7 projects in place.

As with the just-launched Windows 8 and RT, in recent Office launches Microsoft has demonstrated a habit of shipping a new desktop operating system version first. This is typically followed a few months later by a new version of Office so IT shops are not overwhelmed by the release of both at the same time.

Why administer the Office 2013 upgrade?

Certainly, some new features and capabilities help to make Microsoft Office 2013 more compelling for some classes of users. For instance, one place where the new version shines is with customers who use multiple devices.

"[Also], if you see Windows 8 or RT in your future, [Office 2013] is very compelling because you'll get the touch capabilities," Miller said.

If those capabilities aren't of interest or the customers aren't willing to invest in new touch-sensitive devices, however, many IT shops may find it hard to rationalize anteing up for one of the new subscription offerings. That leaves Microsoft in a touchy situation. It wants to move customers to the subscription model, but not lose customers on the way.

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