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Microsoft retreats from Office 2013 restrictive licensing

Backpedals from retail licenses permanently tied to one PC, lets users move suite to another machine

Microsoft today backpedaled from a sweeping change in its licensing for retail copies of Office 2013, saying that customers now have the right to move the software from one machine to another.

"We received customer feedback that they wanted this flexibility, and we thought this was reasonable, just and fair," said Jevon Fark, senior marketing manager with the Office team, in an interview Tuesday. "We will honor these new terms starting this morning."

The revised policy lets customers who purchased a retail copy of Office 2013 -- the $140 Home & Student, $220 Home & Business or $400 Professional editions -- reassign the license to another PC they own or control.

That's a change from the end-user licensing agreement (EULA) that debuted with Office 2013: Out the gate, the "perpetual" licenses sold at retail -- those paid for once, with rights to use them forever -- were permanently tied to the first PC they were installed on.

Under the now-defunct licensing terms, customers were not allowed to delete Office 2013 on one machine, then install it on another, even if that second PC was a replacement for the first, which may have been lost, stolen, damaged or simply outworn its usefulness. The only exception was if a computer had conked out while under warranty.

That raised hackles, not only in comments responding to the Computerworld news story on the restrictive licensing, but also those appended to a Feb. 19 blog entry where Fark tried to explain the move.

"This is not fair," said a commenter identified as Helinton Roberto Dias on Fark's blog. "So I pay $399.99 for Office Pro[fessional], my computer is stolen or bricked. Guess what? I need to pay again to have Office in my new computer. No way."

Today's change was essentially a reversion to the licensing policy of Office 2010, which allowed users to reassign retail copies -- but not those installed by computer makers -- to a different system. Fark confirmed that Tuesday.

That means customers can reassign an Office 2013 retail license, including those for the standalone titles like Word or Excel, once each 90 days, with exceptions made for hardware failures.

It will take about three months for Microsoft to revamp the mechanism it used to enforce the policy -- the Office activation system -- so that users can move copies by re-entering the 25-character key and activate automatically, said Fark. In the meantime, customers will have to call Microsoft's technical support line to finalize a transfer.

"If customers have any problems, even after [online activation is re-enabled], they should call support again," Fark said, stressing that Microsoft's support personnel have been briefed on the change.

Analysts had called the original Office 2013 licensing a huge departure from past practice, blasted Microsoft for hiding the new policy in the EULA rather than plainly inform customers, and linked the move to Microsoft's plan to push people to its Office 365 software-by-subscription plans.

Microsoft had acknowledged the latter when it said two weeks ago, "We've been very clear in all of our communications that customers seeking transferability should get Office 365 and that Office 2013 is licensed to one device."

During Tuesday's interview, Fark declined to discuss why Microsoft had originally limited Office 2013's license to a single PC. In a later follow-up email, however, Fark repeated what Microsoft had said earlier: "We changed our product line up and not licensing terms," he said.

Microsoft based that concept on the fact that it dropped the multi-license packages which had been prominent in Office 2010. Like the retail price increases, the demise of the multi-license products was a prong in Microsoft's strategy to make perpetual licenses less attractive than Office 365 subscriptions. The Office 2010 "product key cards" (PKCs) -- cheaper, retail-only products sans an installation DVD -- did not allow license reassignment. By Microsoft's logic, it was simply replacing the Office 2010 PKCs with the retail versions of Office 2013.

The experts didn't buy it. "Let's be frank. This is not in the consumer's best interest," Daryl Ullman, co-founder and managing director of the Emerset Consulting Group, which specializes in helping companies negotiate software licensing deals, said in an interview two weeks ago. "They're paying more than before, because they're not getting the same benefits as before."

Office for Mac, which also saw price increases this year, is not affected by the new policy, as its EULA already allowed users to move a copy to another Mac. Nor are any of the Office 2013 volume licenses sold to enterprise impacted, as those have always allowed flexible license reassignment.

Even with the change, Office 365 subscriptions remained the most flexible on the license transfer front. The by-subscription plans let customers yank rights to Office from one machine and use it on anther at any time, with no 90-day restriction. Office 365 Home Premium, which Microsoft rolled out in January, allows five Office copies on a household's computers, while Office 365 Small Business Premium offers the same number, but for a single user.

"A key ingredient in our formula for success [for Office] is listening to our customers, and we're grateful for the feedback behind this change in Office licensing," Fark concluded in a new blog post today. "Thank you."

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

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