Office 365: The Increasing Viability of SaaS Subscriptions

Software-as-a-service (SaaS), a pricing model where users pay subscription fees to use applications as opposed to buying licenses outright, is here to stay. Microsoft's Office 365 is a case in point.

Renting vs. Owning

In the past, users have faced a renting vs. owning tradeoff: Office 365 was available for cashflow-friendly low monthly payments but would cost more in the long run than traditional licenses. Yes, using Office 365 meant having access to the newest versions of Word, Excel, and Powerpoint as soon as they became available without having to pay for an upgrade license, but still -- long-term cost was lower with a traditional license.

How The Game Has Changed

Now, the scales may be tipping in Office 365's favor. Not only has Office 365 improved as a product -- many versions allow a single user to download full versions of Office apps to multiple computers and tablets, which offers a potentially huge cost savings in itself -- but the subscription price has also come down to a point that the long-term cost argument may not always apply. In some cases, users who value maintaining the most recent version of Office may actually save money by choosing Office 365, assuming that the user would upgrade to the newest version every 3 years.

Of course, not all users want or need to upgrade to the latest version every 3 years, so there are some instances where traditional licensing may still end up being less expensive. But again, this may be offset by the fact that many users now have multiple devices (desktops, laptops, tablets, etc.), and whereas traditional versions of Office would require separate licenses for each device, Office 365 only requires one.

As we stated at the opening, all of this is indicative of a (hopefully) positive trend in software licensing. SaaS can mean both cost savings and improved efficiency for all kinds of businesses.

Wonder if Office 365 is right for your business, or if there are other SaaS solutions you could be using? Drop us a line.