Microsoft is raising the price of Office 2019 licenses for the first time in nearly a decade. Purchasing the productivity suite now costs roughly 10% more than it did back when Office 2016 was introduced. This may be in an attempt to move users over to subscription pricing.
Computer World reported that Office 2019 Home & Business' new $250 price tag is about 9% higher than the 2016 edition's $230. Office 2019 Professional jumped 10%, too, from $400 to $440. (The base Office 2019 Home & Student edition costs the same $150 as it did before.) Microsoft announced similar price hikes for commercial licenses sold in volume earlier this year, meaning the mid- and high-tier editions cost more everywhere.
Microsoft hasn't raised the price of its Office suite like this since Office 2010 debuted. That doesn't mean it's unusual for software licenses to rise in price over time, or at least start at the base price after the previous version has seen various price reductions and discounts, but it's uncommon for Microsoft. Especially when you consider that the price of an Office 365 subscription didn't rise alongside the price of an Office 2019 license.
The company is making a clear statement: Office 365 is the future, and even though it's committed to making at least one more version of the productivity suite for licensed use, people might have to pay more for it than they expected. That isn't to say Office 365 will never rise in price, but at least for now the service's cost will remain consistent no matter what version of the actual Office software it's providing access to.
It's not like Microsoft has been sneaky about pushing its customers towards Office 365. Its website (opens in new tab)includes a "Buy Office 365" button, the first options in the Plans & Pricing pages (opens in new tab) are for Office 365 subscriptions, and it has often focused on the subscription offering in its announcements. The company even pushed Office 365 (a bit more gently this time) in the blog post announcing that (opens in new tab) Office 2019 was available to download on Windows and Mac:
"Office 2019 is a valuable update for customers who aren’t yet ready for the cloud. And each time we release a new on-premises version of Office, customers ask us if this will be our last. We’re pleased to confirm that we’re committed to another on-premises release in the future. While the cloud offers real benefits in productivity, security, and total cost of ownership, we recognize that each customer is at a different point in their adoption of cloud services. We see the on-premises version of Office as an important part of our commitment to give customers the flexibility they need to move to the cloud at their own pace."
Now the company's appealing directly to its customers' wallets. Buying a license can be cheaper in the mid-term, but in the short term, Office 365 subscriptions cost less than even the base Office 2019 Home & Student license. In the long term, a subscription can also end up costing less as long as Microsoft releases new versions of Office that require their own (and potentially gradually more expensive) license and someone can't use old versions.
This is the way technology in general, and Microsoft specifically, are going. The company hardly sells new versions of Windows 10 anymore, has revealed plans to shift gaming over to subscriptions via Project xCloud and Xbox Game Pass, and has ratcheted up the pressure to ditch Office licenses in favor of Office 365. Eventually those of us who remember buying software are going to be looked at like people who remember buying gas for 10 cents a gallon.