Why Software is Moving to a Subscription Model, and Why It’s a Good Thing
Over the past five years, you may have noticed that more and more software is moving away from being a “one-time purchase” and shifting to a subscription-based service model instead. While, at first glance, this may appear as a tactic to get more money out of you, it also offers numerous long-term advantages. Gartner reported that, “By 2020, more than 80% of software vendors will change their business model from traditional license and maintenance to subscription.” Microsoft has caught on to this trend. Software Subscription Model vs License When Office 365 first launched in 2013, this subscription-based version of Office was available for the general public to use. Many people were confused—they saw Office software as something you bought one time. Then, only if they wanted or needed access to the latest functionality, they could pay to get the latest year version (such as Office 2019). However, this all changed with the introduction of Office 365 Home/Personal and Office 365 Business Premium. This new subscription-based software model surpasses the old version of the Office business enterprise software in several ways. As a business, if you want to stay competitive, efficient, and keep your data secure, you should embrace this change. So, this isn’t something you’re going to be able to avoid as a consumer of software—and frankly, you shouldn’t. Here is a little bit of information about why this change is so exciting. Subscription Software Model Security Recent cyber attacks like Facebook’s infamous data breach or Advent Health Medical Group’s cyber attack that lasted for 16 months are just some of the biggest incidents that have recently plagued the news. One solution for preventing these attacks? Keeping all your devices’ software updated at all times, with no exceptions. After phishing, vulnerabilities in old software are one of the most common ways for criminals to breach your company’s security, and it’s making them serious money (as in BILLIONS of dollars a year from businesses just like yours). Subscription models ensure you’re continuously running the most updated version of the software possible. With a subscription-based software such as Microsoft 365 for Business, the newest security measures are features are automatically updated as soon as they’re rolled out—minus the need to be aware that a new version exists, download it, and manually install it on your devices. Subscription Software & Microsoft Cloud One of the best examples of why this newer subscription-based software model is better than the old way of purchasing software is the massive difference between purchasing software one time, such as Office 2017, and having an Office 365 subscription. They share the name "Office," so it may sound like you are just paying for Office tools such as Word and PowerPoint over time instead of all at once. While you do have access to the whole Office Suite under a subscription-based model, you get so much more with it, too. Because Office 365 is connected to the Microsoft cloud, you’re able to collaborate on files in real time with Microsoft Teams. Do you use a file server or shared drive? Office 365, with its terabyte of storage per user, enables you to chuck that thing in the trash (it’s what we did and you should too). Backup your files? No need to spend time on that anymore. Do you have software that tracks mileage, does your accounting, manages projects, provides group chat, share files, hosts video and voice meetings with screen sharing, manages customer communication, books appointments, etc.? Office 365 combines all of these functions in one platform that you can access from anywhere in the world. By leveraging the Microsoft Cloud to not only provide you with the best suite of productivity software ever made, but a solution you can securely run an entire business with, this subscription-based model becomes a game changer. Automatic New Features Subscription software rolls out features as they are ready, not just when a new version comes out. You used to have to wait between releases of software to get new features; for example, a new version of Word only came out once a year. Not so with the subscription model—when a feature is ready for prime time, you get it immediately without any further effort or investment. Enhanced Scalability With a subscription-based model, your business only needs to pay for the software it actually uses. As your employee count fluctuates during times of seasonal scale-back or booming growth, so too do your costs and software needs. With the ability to exactly pinpoint the software that you need, it becomes less expensive to onboard a new hire when you don't need to pay for their software all up front. Additionally, when an employee leaves their position, you can simply cancel their account rather than letting it sit idle and drain resources. Microsoft's Subscription Software Model As we mentioned earlier, Microsoft is now selling Office by way of a new subscription-based product called Microsoft 365 Business. Why make the switch? It comes down to device management—and this is what has traditional managed IT service providers very nervous. Microsoft 365 Business gives even small businesses truly enterprise-grade device management tools, making once difficult IT tasks easy or simply unnecessary. These tools keep your devices safe and keep the data on your employees' devices from being compromised. If you lose a device or part ways with an employee, you can immediately revoke access or remove just your company's data from that device instantly while leaving everything else intact. In addition to truly enterprise-grade device security, deploying new devices becomes a breeze. Say you spill an extra large cup of coffee on your device, or it falls into a volcano. No problem, grab another one, enter your username and password, and in no time you’ll be back up and running—with all of your applications and data exactly how you left them. Companies that properly implement what Microsoft 365 Business has to offer see their IT demands and costs plummet. Instead of manually installing updates and tediously deploying new workstations, your IT staff can focus on the company’s mission. No longer worried about keeping you up and running, but where you’re running to. Really? If this all sounds like crazy talk, or you’re already ahead of the game and know that you are ready for a truly modern, connected office, give us a call, get a road map, and see how these changes not only bring a ton of value to your company, but can actually save you money. We’re here to schedule an introduction when you’re ready.
What are the differences between Microsoft Office 2016, Office 2019 and Office 365?
Microsoft Office may be the de facto productivity tool for millions of workers worldwide, but it's certainly not a one-size-fits-all solution. Rather than a single product offering, there’s a whole slew of options to meet the needs of various users. Office can be used on iOS devices such as iPhones and iPads, Androids, and desktop and laptop computers—whether they’re Windows or macOS devices—and for business or personal use. But when you get down to it, there are really only two kinds of Office. The stand-alone suite version of Office software. Office 2016 traces its roots back to the last century. Its successor, Office 2019, was recently released. The subscription-based service model of Office 365. This model of Office debuted in 2011, with options for both personal and business use. How they differ can be confusing, especially since each includes, more or less, the same applications. However, they way in which they are paid for, serviced, and connected to the cloud differ. To help you better understand your Microsoft Office options, here is a breakdown of those three top differentiators that these tools apart. Plus, we’ll take a look at what's coming based on Microsoft's new support policies for the Office 2019 and Office 365 down the road. Microsoft Office Differences Of the differences between Office 2016, Office 2019, and Office 365, purchase plans are among the most striking. Microsoft Office 2016 Differences from Office 2019 Office 2016 and Office 2019 are dubbed as “one-time purchases.” Microsoft defines this term as when, "...you pay a single, up-front cost to get Office applications for one computer." Up-front is the key adjective there; Office 2016 and 2019’'s entire purchase price must be laid out before receiving the software. This means that whether someone walks into a retail store and buys one copy at a time or purchases hundreds via volume licensing, that purchase (of a license to legally run the software), gives the buyer the right to use the software in perpetuity. In other words, the license has no expiration date, and users may run the suite as long as they want. Pay for Office 2016 this year and use it for the next eight years? Fine. Run Office 2019 until 2030? There’s nothing stopping you (as long as the computer it was installed on keeps working, that is). Office 365 On the other hand, Office 365, the version of Office that Microsoft is pushing most aggressively, is a subscription-based service. This means payments are made monthly or annually. The latter may produce savings in exchange for the commitment: Office 365 Business Premium, for instance, costs $12.50 per month per user when paid in an annual lump sum ($150 per user), but $15 per month per user on a month-to-month plan ($180). All enterprise plans, from E1 to E5, as well as ProPlus, do not offer a monthly option, but require an annual commitment. Like any other subscription-based model, Office 365 provides a valuable service. In the case of Office, it's the right to run the suite's applications—but only as long as payments continue. Stop paying, and rights to run the apps expire (actually, they don't immediately stop working; the applications will continue to operate normally for 30 days past the previous payment's due date). A license for Office, then, is contingent on sustained payments. Halt the latter and the license is revoked. Restarting the payments restores the license. However, with subscription-based software, you only need to pay for the software actually being used. This can actually be a huge benefit, especially for businesses. Not every employee needs to have the same tier of software—for example, a company could use Business Premium for its highest-end executive users and Office 365 Business Essentials for rank-and-file workers who only need access to the collaboration software. Additionally, if an employee leaves the company, their subscription can be stopped without having to pay for it for the remainder of the year, which is ideal for business scalability. Microsoft Service Options Although payments define one difference between Office 2016, Office 2019, and Office 365, Microsoft's turn to a faster development and release pace is also of major importance to users and the IT professionals who support them. Microsoft Office 2016 vs 2019 Think of Office 2016 and 2019 as traditional software made and sold in traditional ways. That holds for servicing, too. Microsoft provides monthly security updates for Office applications, usually on the second Tuesday of each month, and also fixes non-security bugs for the first five years of the SKU's lifecycle. But, the stand-alone suite versions of Office software do not receive upgrades with new features and functionality. What you get when you buy the suite, feature-wise, is it. When Microsoft produces a new edition, which it will eventually do, you would need to pay another up-front fee to have access to the newest edition’s features. Office 365 Office 365, on the other hand, has a completely different servicing model. While the Office applications licensed to users through Office 365 receive the same security patches (and non-security fixes) distributed to Office 2016 and 2019, they also acquire new features and functionality as updates as soon as they are released. This means that as new security, collaboration, and creativity capabilities are made, Office 365 subscribers will have immediate access to them. There’s no need to go to the store or make an online order and manually install new software updates. As new features and functionality accrue, the applications evolve until, at some point, Microsoft says they are sufficiently different to warrant a new numerical moniker, such as Office 2019 or Office 2020. It will then package those versions into an upgraded suite for customers who continue to make one-time, up-front purchases. Microsoft's Cloud Services Connectivity Neither Office 2016, Office 2019, or Office 365 are completely cloud-based, but all are able to connect with Microsoft's cloud services (and some third-party services). Currently, both the applications awarded in a one-time purchase of Office 2016 and those installed as part of an Office 365 subscription can connect with services such as Microsoft-hosted Exchange, OneDrive storage, and Skype for Business. However, in April, Microsoft announced a major change in the rights of Office 2019's successors to do just that. After Oct. 13, 2020, Office applications acquired through an up-front purchase of the suite must be in their "Mainstream" support period, which is the first five years of the traditional guaranteed 10, to connect with Microsoft's cloud services. The change takes aim at customers who mixed cloud services with traditional one-time payment software as it effectively halves the length of time the latter can be used in those organizations. At the same time, the post-2020 rule advances Microsoft's efforts to push business customers toward Office 365. The company hasn't been shy about saying so. "Office 365 ProPlus is our recommended Office client for Office 365 users," said Alistair Speirs, a senior operations program manager, in an April post to a blog. "This is the Office client that stays up to date with frequent feature releases and ensures the best service experience." Extended Support with Microsoft Office Suites On Feb. 1, Microsoft revealed changes in how it will support Office 2019, the successor to Office 2016 in the "one-time purchase" category. The company also previewed a shape-shift in support for Office 365, specifically the ProPlus component, the desktop productivity applications, slated to take effect in January 2020. Essentially, Microsoft plans to slash future support for Office 2016 and 2019. "Office 2019 will provide 5 years of mainstream support and approximately 2 years of extended support," wrote Jared Spataro, the general manager for Office, in a Feb. 1 post to a company blog. “This is ... to align with the support period for Office 2016. Extended support will end 10/14/2025." As Spataro implied, Office 2016's support also will come to a stop Oct. 14, 2025. Office 2016 is to get 10 years of support (5 in the "Mainstream" support stretch, 5 in "Extended"). Office 2019 will get just 7, representing a decrease of 30%. Because Office 2019's Mainstream support will presumably end sometime in October 2023, that will be the cut-off for connecting Office 2019's applications to Microsoft's cloud services. Office 2016 and 2019's simultaneous retirement is the strongest signal yet that Microsoft will shut down the one-time purchase option after Office 2019, finally making the subscription-based Office 365 the only way to license the productivity applications. Spataro dropped other clues about Office's future. "It has become imperative to move our software to a more modern cadence," he wrote, implying that years of support for perpetually-licensed software was either onerous for Microsoft or put customers at risk (or both). Along with the reduction of the support timeline, Microsoft Office 2019 can only be supported on Windows 10 operating systems or higher, even though Windows 7 and Windows 8.1 are still operating. Meanwhile, Office 365's ProPlus will see its support curtailed, too. The new policies stake out Windows 10 as the only supported editions of Microsoft's OS as of January 14, 2020, the head-to-assisted-living date for Windows 7. Windows 8.1 will also be unsupported by Office 365 ProPlus, as will the Windows 10 LTSC (Long-term Servicing Channel) version. In other words, Office 365 subscribers running Windows personal computers have less than two years to upgrade to Windows 10 if they're to continue working with the suite-by-subscription. To learn more about which Office tools are right for your business, reach out to the experts at Protected Trust today!