Microsoft unveils Office 2013 and Office 365 pricing

Microsoft, faced with challenges from Google and other vendors, is taking to the cloud in a big way with its upcoming release of new Office productivity software.

The software giant on Monday revealed US pricing for a pair of cloud-based Office 365 software packages as well as for a new trio of traditionally licensed, locally stored Office 2013 suites. Office 365 will come in two versions, Office 365 Home Premium and Office 365 Small Business Premium. The new Office 2013 lineup can be purchased in Home & Student, Home & Office, or Professional SKU flavours.

Microsoft hasn't solidified a release date for its new Office products but did say that any purchase of Office 2010 or Office for Mac 2011 on or after 19 October would be "eligible for a free upgrade to the new Office at the time of availability."

Office 365 licenses will be sold on a subscription basis, with the Home Premium edition priced at $99.99 (£60) per year and the Small Business Premium edition priced at $149.99 (£90) per user per year. Both versions allow for installation of Office 365 on up to five PCs or Macs.

Users of Office 2013 will still pay a lump sum for the license on a single PC or Mac, ranging from $139.99 (£85) for Home & Student to $399.99 (£245) for the Professional edition. You can see a full pricing breakdown plus supported features in each version of Office 365 and Office in the chart from Microsoft (bottom).

Microsoft sent us some user case scenarios for the various SKUs. For example, here's how the Redmond-based company sees a family of three taking advantage of Office 365 Home Premium:

The Jones family has a kitchen PC. Susan, the mother, has a Mac, and Jason, the father, has a PC and plans to get a new Windows 8 tablet. Their daughter has a PC for school. Historically, they've upgraded their devices and Office every four years, so we'll use a four-year subscription window.

A subscription costs £245 for four years. By contrast, they would have to spend around £430 to equip all five of their devices with Office Home and Student 2013. With a subscription, the Jones clan save £185, and they get additional benefits like additional SkyDrive storage, Skype credits, and the Office on Demand service packaged into the deal.

UK pricing has not yet be confirmed. All pound sterling figures cited are based on today's exchange rate and may be nominally rounded up or down. They should not take be taken as a formal indicator of cost.

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