There’s a lot to like about Microsoft Office for iPad but users have one big gripe about it: the price. The only way to get it is to have a subscription to Microsoft’s paid cloud Office app, Office 365.
Pricing for Office 365 is complicated. For individuals, it costs $US99 a year, but that will cover a whole family of devices, five of them. Students get a better deal, $US80 for four years that will cover two devices. These prices also include versions of the software that run on your PC when your not connected to the cloud.
As we previously reported, part of the reason for this pricing scheme is to sidestep Apple’s revenue sharing requirement.
Things get even more complicated, but cheaper, for businesses, Microsoft licensing experts tell Business Insider. Just like consumers, businesses are required to have Office 365 in order to use Office for iPad.
Businesses who already have PC versions of Office and a big long-term contract with Microsoft called an “enterprise agreement” can get Office 365 — and iPad for Office — via something called an “add-on,” says Microsoft reseller SHI.
Prices for the add-on start at $US5 per user per year for a small business (less than $US25 employees) and $US8 per user per year for an enterprise, Microsoft says.
So for a less than $US10 per user per year, a business can get Office for iPad, and that’s if they pay full price. Most enterprises have big contracts with Microsoft and pay way less than full price.
There are some catches though. Businesses can’t get Office 365/iPad for Office added to their enterprise contracts if they are using older versions of Office like Office Professional 2010, says enterprise software licensing consultant, Cynthia Farren, who makes her living helping companies save money on software contracts.
If they need to upgrade, the list price is $US20/user per month. But again, a company can negotiate that.
Now is a particularly good time to negotiate a sweet deal for Office 365, too, Farren says.
That’s because Microsoft will make more money on each Office 365 subscription over time. So “there is definitely an incentive to Microsoft” to sign deals that get customers on a subscription plan, Farren tells Business Insider.
Enterprises win because they pay less money up front, and, as long as they are paying for the subscription, Microsoft will maintain the software. There should never be a time when Microsoft pulls the plug on Office 365 like it did with XP.
A Microsoft spokesperson confirms that the company does negotiate pricing for big customers, on long-term contracts, telling us:
“Many enterprises choose to sign enterprise agreements (EA), which give them the best rates for the products and services that meet their specific needs in return for their volume and duration commitment.”