Microsoft faces resistance in effort to push people to Office 365

Microsoft is backtracking on its rigid licensing policy for Office 2013, which was designed to push people to its new subscription model.

The situation indicates that people may be more invested in the old model than Microsoft expected.

In a reversal of policy, Microsoft said this morning that people who buy Office 2013 – the perpetual-license version of the software – will be able to transfer it to a different computer in a limited fashion.

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The company initially said that Office 2013 included a license to one computer for the life of that computer and was non-transferable. The only exception was if the PC failed under warranty. Out of warranty though, a customer was out of luck and would have to buy a new copy of Office along with a new computer.

For previous versions of Office, users were given three installs so they could transfer the software to a new computer if they upgraded their machine.

When Microsoft spelled out the original Office 2013 policy in a blog post, people started complaining in the comments.

“There are simply too many alternatives that I can make work. Google documents? LibreOffice? I’m already considering biting the bullet and making the switch right now since compatibility is already good enough for these suits,” nicholasopen wrote in the comments.

The company hinted that it was amenable to a change. Microsoft executive Jevon Fark also left a comment after that blog post saying that the company was listening to the complaints and that if someone had a computer fail outside of warranty or wanted to move their Office 2013 license to a new computer, to contact Microsoft customer support.

The updated terms, announced this morning, allow customers to transfer the software to another computer but no more often than once every 90 days, unless you’re transferring due to a hardware failure.

With the latest release of Office, Microsoft is introducing a totally new model. While customers can buy Office 2013 -- the traditional suite of software -- they now also have the option of buying Office 365. Office 365 includes the traditional suite of software but users pay an annual subscription, which entitles them to software updates, 20 GB of Skydrive storage, and 60 minutes of Skype calling per month.

Microsoft seemed to make Office 2013 an unattractive deal, costing $140 and including no updates, Skydrive storage, or Skype minutes, in an effort to push people toward its new subscription Office 365 offer. 

“What we’re hearing is customers are excited about the subscription at $99, which is less than what you’d have to pay” previously for three installs, Sandhya Thodla, senior product marketing manager at Microsoft said during an Office 365 launch event in January. “But you get all the benefits of Skydrive and Skype. The value proposition is more affective.”

It appears, however, that enough customers want the one-time fee but also want it to include similar terms as previous versions and so Microsoft has decided to ease up on the Office 2013 terms.

It’s too early to know if the uproar over the licensing terms indicates that the bulk of people prefer the old, perpetual licensing model. But enough people complained that Microsoft decided to ease up, indicating that the company hasn’t totally accurately predicted customer reaction to the shift.

Nancy Gohring is a freelance journalist who has been writing about mobile networks, cloud computing and consumer electronics for more than a decade. Read Nancy's bio