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What Office 2013's draconian licensing policy really means for you

Microsoft may be pushing a little too hard to make Office 2013 an impractical, less appealing option than Office 365.

Microsoft might be selling two versions of its Office suite, but its licensing policies suggest the company is not only trying to thwart software piracy, but also drive customers away from Office 2013 and over to the Office 365 subscription model

First, a little background. Purchasing Office 2013 only provides a license for a single PC (as opposed to up to five PCs with Office 365). The Office 2013 license goes one step further into the draconian abyss, though, by specifying that the software is literally tied to the device it's installed on. This means you can't re-install Office 2013 if you get a new PC.

Let's state that again: You can never install Office 2013 on a new PC--even if you own the new PC, and even if you have removed Office 2013 from the original PC. So, if you buy Office 2013 today and install it on your PC, and then tomorrow your PC is turned into a molten pool of plastic in a house fire, Microsoft will expect you to purchase a new copy of Office 2013 for your replacement PC. Seriously.

I asked Microsoft for clarification, and I received this official response: "Office 365 Home Premium works across up to 5 devices (Windows tablets, PCs or Macs) and can be transferred across devices. The Office 2013 software is licensed to one computer for the life of that computer and is non-transferable."

The official response from Microsoft also makes the claim that the Office 2013 licensing is nothing new: "Office 2013 has the same licensing provisions around transferability as the equivalent Office 2010 package, which was the package purchased by most Office 2010 customers."

However, a recent Computerworld article contradicts that assertion, and points out that the Office 2010 EULA specifies, "You may reassign the license to a different device any number of times, but not more than one time every 90 days."

So, what's the catch? The confusion stems from a difference in the licensing terms depending on how you purchsed Office 2010.The difference is that Microsoft stated that Office 2013 has the same licensing and transferability as the equivalent Office 2010 package. The Computerworld article quotes the EULA of the Retail licensing as opposed to the Product Key Card (PKC) licensing--which is the licensing model Microsoft is referencing when it claims the new license is the same as the most popular Office 2010 package. 

To be clear, though, with Office 2013, all licensing follows in the footsteps of the Office 2010 PKC licensing, and Microsoft does not allow you to reinstall it on a new PC. Your mileage may vary if you call support to reactivate Office 2013, but the wording of the EULA doesn't leave any room for interpretation.

The licensing policy is driven in part by Microsoft's efforts to combat software piracy. By drawing a very strict line in the sand tying Office 2013 to a single PC, Microsoft removes any ambiguity about which PC is the legally licensed PC for a given registration code. It also defeats any possibility that the same registration code could be fraudulently used on multiple PCs.

Rob Enderle, principal analyst with the Enderle Group, explains why piracy is also a driving force behind Microsoft's push to Office 365. "It is estimated that over a third of Office users don't have a valid license and that represents a revenue loss to Microsoft in the billions," adding, "You toss a number like that in front of any CEO, and they are likely to get a bit draconian and that is likely what is happening here."

It is also another very strong incentive for customers to move to Office 365. Based on the pricing and licensing differences between the two, Office 365 makes more sense in almost every imaginable scenario. If you also consider the fact that Office 2013 is literally tied to one physical PC and can't be re-installed on a new one, it makes Office 2013 impractical even in the rare situations where it might seem to make more sense than an Office 365 subscription.

Unless you can guarantee that you will only need Office 2013 on one PC, and that the PC you install it on will not break or be replaced in the next three or four years, you should either stick with a previous version of Office, move to an Office 365 subscription, or make the switch to an alternative solution like Google Docs, or Libre Office.


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