Office 365 Home Premium: a first look at Microsoft's subscription Office service

Microsoft's new subscription-based version of Office 2013 lets you use your applications anywhere. But does it really save you money?

Microsoft's Office 365 Home Premium is the new subscription-based version of Office 2013, in which Microsoft gave its office suite a thorough and well-done makeover. You can think of Home Premium as a "wrapper" of sorts around Office 2013, with extra Web-based features.

Office 365 Home Premium (which is the basic version of the suite) includes the core applications that are included in all versions of Office 2013 -- Word, Excel, PowerPoint and OneNote -- as well as Outlook, Publisher and Access. For $100 (there's a one-month free trial period), users can install it on up to five devices (including Windows 7 and Windows 8 PCs and tablets, and Apple OS X computers).

(Note: Other upcoming versions include Office 365 Small Business Premium, which is designed for businesses with up to 10 employees; Office 365 ProPlus, which will include 25 user accounts and 5 installations per user; and Office 365 Enterprise. These will also offer a variety of additional features; there is no information yet on when they will ship.)

A cleaner look

In line with Windows 8, the applications in Office 2013 -- and, by extension, Office 365 Home Premium -- have a cleaner look, with less clutter and a flatter, less-noticeable Ribbon. In addition to the new interface, there's also SkyDrive integration, touch-based navigation and features, and underlying changes to many of the Office applications.

For example, Word can now edit PDFs and has improved commenting features. PowerPoint offers new tools including those for embedding photos and pictures from Flickr and Facebook. Excel includes new analytics tools. Outlook has been tweaked with improved searching and a streamlined navigation pane.

The command center

With Office 365 Home Premium, the website becomes your command center - the place from which you install and manage Office on your devices. In fact, when you buy Office 365 Home Premium, even in a retail store, you don't get a DVD. Instead, you get an installation key, which you use to install Office on your device from the web.

The web-based installation offers both good and bad news. The good news is that you don't have to worry about losing the disc if you need to re-install the package. The bad news is that if you don't have a lightning-fast connection, expect to wait a while for Office to install. For example, on my occasionally slow home Wi-Fi network, it took more than two hours to download and install Office on one computer, and more than three hours on another. Of course, your experience will vary depending on your connection speed.

On the My Account section of, you're able to see the machines on which you've installed Office, and handle payments and renewals. From there you can also deactivate Office on any machine (in case you want to use that install on a different computer). If you need to re-activate Office on a machine, just run any Office app and you'll be prompted to enter your Office 365 Home Premium user name and password. also functions as way to manage your documents. Office 365 Home Premium automatically syncs files between your local machines and Microsoft's SkyDrive cloud-based storage service, and lists them on You can click any file you see there and view it in the web-based version of Office.

If you want to tweak the file, you select Edit Document and choose to either edit it using either the web-based version of Office or the client version on your machine. (The client has more features than does the web version, so most people will probably choose that method.)

You can create new Office documents on Windows 7 or Windows 8 machines that don't have Office installed by using a nifty feature called Office on Demand. Go to the My Office section of, and in the "Office on Demand" section, click on the application you want to use. A version of that app installs temporarily (and quickly) on the PC you're using. Once you exit the application, it will automatically uninstall.

I found this feature worked fine, although when I tried using it on a machine that already had Office 2013 installed, it wouldn't install (which makes a certain amount of sense). also has a store where you can buy or download free apps designed for Office and its individual applications - for example, there's a Bing Finance app for managing your investments and another app that provides a Merriam-Webster dictionary. As of this writing, I wasn't particularly impressed with the selection of apps available, but that might change over time.

Money matters

It's pretty obvious that Microsoft wants to encourage users to go with its new subscription plans. Prices for the traditional Office suite are now higher than they were before and some multi-license versions have been eliminated.

The question is: Will you be better off going with the subscription model or buying Office 2013 in the traditional manner?

Well - it depends.

The Office 365 Home Premium subscription costs $165 a year for up to five PCs and Macs (including tablets). That includes automatic free upgrades to new versions of Office. You also get 60 minutes of free Skype calls every month and 20GB of additional SkyDrive storage over the basic free 7GB.

Depending on how you use Office, this new subscription model can be a tremendous money saver or a losing proposition. If you use Office on several computers (and if you use non-core applications such as Outlook, Publisher and Access) Office 365 Home Premium can save you a lot of money. The Professional version of Office 2013 - which includes Word, Excel, PowerPoint, OneNote, Outlook, Publisher and Access - costs $859 for a single install. Buy that for five computers and it adds up to a whopping $4,295.

If you use several computers, don't need Publisher and Access, but do use Outlook, it still makes more financial sense to buy Office 365 Home Premium. Office 2013 Home & Business, which includes Outlook but not Publisher and Access, sells for $425. So for five PCs and Macs, that would run $2,125 - still considerably more expensive than the $165 per year subscription.

However, if you don't use Outlook and/or you use Office on fewer than five machines, the economics become murkier. The Home & Student version of Office 2013, which includes the core applications of Word, Excel, PowerPoint and OneNote, but doesn't include Outlook or other applications, costs $239. If you only need Office on a single machine, in four years you'd pay $660 for the subscription vs. $239 for the traditional version. You'd even save money if you bought the Home & Student version for two machines - $478 vs. $1,320. But if you then upgrade, you'll have to pay for a new version of Office.

If you can prove you're a university student, by the way, the subscription route is definitely the way to go - you can get Office 365 University for $145, which includes a four-year subscription that covers two machines.

And of course, if you're purchasing one of the business versions, you'll have to also factor in the features you need for your enterprise and how the subscription model works with your staffing needs, among other things.

The upshot? For quite a few people, the new subscription model makes more financial sense than buying using the traditional route. But not for everyone.

Bottom line

Microsoft Office 365 Home Premium offers an entirely new way of paying for Office via subscription. If you use Office on multiple computers, there's no doubt that the new subscription service could make sense for you. Not only will you save money, but the web-based tools also make it easy to see at a glance all of your Office files on all of your computers. Given that you also get additional SkyDrive storage and 60 free minutes of Skype, it's a no-brainer.

If you only use Office on one or two computers, though, it's not clear whether you'll want to move to a subscription model. You'll pay more money for Office and the extras might not be worth it for you.

But given that almost everyone at some point will be using multiple machines, it looks like Microsoft Office 365 is the wave of the future.

At a Glance

Office 365 Home Premium


Price: $165/year

Pros: Less expensive for households with multiple computers, automatic upgrades, access from any computer

Cons: More expensive for households with one or two computers