Microsoft Tweaks Office 2013 Licensing After Outcry

Office 2013 users can now transfer licenses from one PC to another, Microsoft said on Wednesday. Customer criticism motivated the change in policy, which had previously limited users to a single installation on a single machine, with exceptions made for computers that failed under warranty. Licenses can now be moved every 90 days.

"Customer feedback" compelled the company to amend its licensing terms, a decision that is effective immediately, wrote Microsoft senior marketing manager Jevon Fark in a blog post. A glimpse into this backlash can be seen in one of Fark's earlier blog posts in which a number of commenters decried the original Office 2013 usage agreement as unfair. Many were incensed, for example, that an Office 2013 product purchased and installed today would not have been transferrable to a new computer bought a short time later.

The new terms cover Office Home and Student 2013, Office Home and Business 2013, Office Professional 2013 and all standalone Office 2013 applications. Although Microsoft acted quickly, amending the terms a little more than a month after the new products' launch, some of the early comments on Fark's latest blog have continued to express concerns.

One user found the new policy "annoying," opining that some users had already opted for Office 365, Microsoft's cloud-oriented subscription service, only because they found the original standalone licenses so unappealing. Other commenters were mining the post's language for signs of hidden restrictions, ostensibly motivated by the fine print Microsoft has crafted in the past.

[ Office could face an uphill battle to win over traditionalists. Read Office 2013: Is Microsoft Out Of Touch? ]

Many commenters interpreted Office 2013's original terms as Microsoft's effort to push users toward Office 365, which allows a given license to be simultaneously installed on up to five devices. This goal has included not only inflexible licenses but also increased pricing for Office for Mac, which was not affected by Wednesday's news and could already be transferred among devices.

Under the previous plan, Microsoft stood to gain in many regards. Standalone, single-time licenses provide a finite source of revenue whereas subscriptions keep the money rolling perpetually, for example. Office 365 additionally conditions users to aspects of Microsoft's Windows 8 philosophy, which strives to provide a single, unified experience across devices and form factors. If more people use Office 365, in other words, many of them will start using the cloud, a habit on which Microsoft hopes to capitalize.

The new licenses might slow some of the progress Microsoft hoped to make, but analysts agree it was the right decision. "I'm glad someone in Microsoft saw sense," wrote Forrester VP Duncan Jones in an email interview. He argued that it was a misleading to call Office 2013's original license terms "perpetual," as Redmond did, because they barred the license from outlasting the hardware on which it ran. "Whether Microsoft saw the reasonableness of the protests, or the negative impact on sales, I commend it for making the right move so quickly," said Jones.

"We are positively impressed that they've reacted so quickly to customer feedback," said Sara Radicati, CEO of The Radicati Group, a Palo Alto, CA-based technology research firm." Still, she also suggested the change might have limited practical effects. When asked what reasons an Office 2010 users might have to upgrade to Office 2013, she said, "To be frank, we don't see many."

Microsoft 365, in contrast, offers a more differentiated experience, with its cloud hooks and access to the latest versions of each program. Radicati implied Microsoft didn't need to strong-arm users toward the new offering through restrictive licensing agreements. Customers are going to move to the cloud at their own pace, she said, adding that by changing the license terms, Microsoft has shifted from "annoying people" to "looking at the long-term picture."

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