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Microsoft Explains Office 2013's Single-PC Licensing Limitation (UPDATE)

Consumers and small business users who purchase Office 2013 are permitted just "one installation" under the new suite's licensing plan, Microsoft explained this week.

UPDATE: Microsoft changed course in an announcement on March 6 and relaxed the transfer restrictions described in the rest of this article. Office 2013 buyers get the rights to make just one installation of Office 2013 on a single machine and they have no transfer rights to another machine -- meaning, it is not permissible to install a copy on a PC and make another copy onto a laptop, according to Microsoft. That's true for those buying Office 2013 Home and Student, Office 2013 Home and Business, or Office 2013 Professional editions through retail or OEM outlets.

There is one exception: It's possible to transfer Office 2013 installations to another PC if there's an equipment failure and the machine gets replaced under warrantee, according to a Microsoft announcement (see Microsoft's chart below).

[Click on image for larger view.]
Office 2010, Office 2013 and Office 365 transfer rights. (Source: Microsoft)

While most consumers might think of boxed Office copies as being sold in just one form, Microsoft had offered two product forms with Office 2010 -- a "product key card" (PKI) version with no transfer rights and a "full package product" (FPP) version that had transfer rights. Those two versions of Office 2010 were sold at different prices. In contrast to consumers, organizations may typically purchase Office through Microsoft's volume licensing, which costs more, but this blog claims that organizations get more too, mostly in terms of licensing and use options.

It seems it's now difficult to find the FPP version of Office 2010 at online shopping sites. There apparently isn't an Office 2013 FPP version at all, and that seems to have caused some consternation. Office users wanting those PC transfer rights either have to hunt down a boxed retail copy of Office 2010 or subscribe to certain editions of Office through "Office 365," which is Microsoft's branding for its online services. (Note that the Office versions sold through Office 365 are not delivered as a service over the Web. They still must be installed on a machine by the end user, despite the association with Microsoft's services.)

In contrast to Office 2013 for consumer users, those who subscribe to Office 365 Home Premium or Office 365 University can install up to five or up to two installations of Office, respectively, on their PCs. These Office 365 subscribers also have the rights to transfer the software to other machines. The transfer involves a deactivation and activation process using a Windows account. The catch for Office 365 users is that their subscription is not a "perpetual license," as afforded by boxed Office 2013 copies. That means that if an Office 365 subscriber stops paying for the subscription, then that person loses the rights to run the software. Perpetual licenses, on the other hand, never expire, so users can always run the software.

Microsoft rolled out its subscription-based Office 365 offerings to consumers in late January for the first time. That novel way of selling Office has perhaps made some consumers scratch their heads about which course to take. Office 365 suites are routinely updated as part of the service, which is a benefit, but it comes at a cost -- namely, another monthly recurring expense in an age of flat wages. If Office 2013 is purchased, then that's a perpetual license, with no recurring monthly fees, but that copy legally can be used only for the life of that one single PC.

Microsoft's announcement somewhat defensively claims that the Office 2013 restriction of a single copy on a single machine was also an option back with Office 2010, and people preferred that PKC option (one copy/one PC) over the FPP option (transfer rights).

"It is important to note that Office 2013 suites have consistent rights and restrictions regarding transferability as the equivalent Office 2010 PKC, which was chosen by a majority of Office 2010 customers worldwide," Microsoft's announcement states.

Of course, the majority of consumers tend to buy the lower priced product. That circumstance likely will remain true in the current stagnant economy. Some alternatives for consumers include using the free Google Docs browser-based service or Microsoft's free browser-based Office Web Apps. Access to Office Web Apps happens by signing up to use Microsoft's SkyDrive storage service, or an Outlook.com e-mail account (formerly known as "Hotmail"), or the Facebook Docs.com.

Free installable productivity suites include LibreOffice, which is a branch project from OpenOffice.org. OpenOffice.org is now an Apache incubator project after a short-lived stewardship under Oracle following its purchase of Sun Microsystems. A list of Office-like productivity suites can be found at this Wikipedia page.

Microsoft's license agreements used to be known as "end user license agreements" or "EULAs." However, this Microsoft blog post claims that they are now called "Microsoft Software License Terms" or "MSLTs." For those wanting to dig into some legalese, it's possible to search for specific MSLTs on any Microsoft product by using this Microsoft search page.

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Reader Comments

Sun, Mar 3, 2013 Charlie McCallan Novato, CA

I believe this new licensing will dramatically impact sales of Office. It has been hard enough to get my clients to purchase the 2 install version, since almost ALL small business owners and some of their employees use both a desktop and a laptop. The single machine limit is bad enough, but most PC hardware lives far beyond the end of the warranty. I can only assume that Microsoft is intentionally killing off the packaged Office Suite to force everyone to an office 365 subscrption. This may work for large organizations, but small businesses and independent contractors simply cannot afford it, especially in the current economy. Apparently I need to start learning the ins and outs of LibreOffice so I can continue to support my clients.

Thu, Feb 28, 2013 James Upton USA

This is why I don't pay for the few MS products that I do use.

Fri, Feb 22, 2013 Paul Katz Washington DC

How many people are going to hold off on buying new PCs because there Office licenses will no longer transfer. With this move, I think Microsoft has lengthened the average PC upgrade cycle by at least 1 to 2 years, and hurt their Windows licensing business....

Fri, Feb 22, 2013 dpete

Anyone know what the situation is when you get the EMail from MS offering the full Office suite for $10 because of your business connection. I have been using the Office 2010 under this program ($10). I even asked for and received an official Office 2013 disk from MS with there logo. I think it even said that I could install it on 2 machines. Also it said that if I was no longer employed by the company, I could not continue to use it (this was also true of my 2010). Does this mean that MS knows when I leave the company and de activates my Office?

Thu, Feb 21, 2013 JB NYC

As an MS stockholder, I'm appalled at MSFT shortsightedness - as Mike M said, it seems that Ballmer is determined to kill off the golden goose.

Thu, Feb 21, 2013 cdr St. Louis

Not an explanation... it's an excuse. Microsoft continues to ignore its customer base.

Thu, Feb 21, 2013 Tim Wessels Some where in the cloud

Well, Microsoft is always working to keep their licensing as confusing as possible. Do you know that there are people whose job consists of understanding how Microsoft's licensing works for all of their products. That said, clearly Microsoft wants to tie Office 365 and Office 2013 to a subscription model. But for those people who don't want Office 365 and the monthly charge to use it and Office 2013, why not a simple "remove the license from this PC" and then re-install it on another PC? This works for other software from other vendors. I fail to see why this would not work for Microsoft Office 2013 and it would make it easy for customers to keep using Office 2013 when they change or replace PCs. The concept of making the license stay with the PC unless it breaks under warranty out to be challenged in court.

Thu, Feb 21, 2013

Seriously bad idea. I am sure Microsoft believes this will produce more revenue because everyone has to rebuy software if there is a machine failure. I foresee lots of VM installs with portable images and/or terminal services installs which could have exactly the opposite effect. Ultimately the customer will get what they want, or they will go somewhere else.

Thu, Feb 21, 2013 David

I almost always build my own desktops & I have always built my own servers (home use only). I guess I can start writing my own manufacturers warranty, but somehow I don't think Microsoft would honor it. I'm between a rock & a hard place if I can't purchase the FPP option!

Thu, Feb 21, 2013 David Baton Rouge, LA

I have been a (mostly) home based, small time Microsoft developer since the days of WFW-3.11. I have been using office since then and I have always bought one copy, installed it on my laptop for most of my work, and also on my desktop development machine so I can work on documentation when I am not programming and also for Outlook. I hate to say it, but I cannot find a good justification for buying 2-copies of Office & Visio and might just be forced to move to an open source solution. I'm not a happy person right now.

Thu, Feb 21, 2013 Darryl Rowe Louisville KY

I bought a new PC, installed Office 2010 and it died. It was replaced, but not under warranty since I hadn't yet sent it in - I took it back to the store where I bought it and got a store credit and paid extra to get a higher-grade model and was then able to install 2010 on the new machine. -- Can I do the same with 2013 if need be? Also, having the ability to have the product on my main machine _and_ my laptop was...and still is...of interest to me. I wonder if I can make an app is VS 2012 that will let me work with my existing .docx, xlsx, and accdb files and just bypass Office....for personal use only, of course.....well, likely forget about testing company add-in there, but I could use a company machine for that...oh, wait! The company is a small business and not likely to buy a Office365 plan or a SA plan, just getting the app thru Dell when they buy a new machine. Well, guess that will work.....

Thu, Feb 21, 2013 Mike M Indy

It's seems Microsoft is determined to kill off their boxed Office software business. This customer unfriendly approach should do it. This will just be one more reason not to upgrade.

Thu, Feb 21, 2013 Al

I don't understand why MS ties anything into a machine's warranty. If 3 years from now my hard drive fails and I need to reinstall Office, the reinstallation shouldn't drive my decision to purchase a new machine or replace the hard drive. It seems more an obvious attempt to sell me Office 2016! As for activate/deactivate, I hope some mechanism is available to do these steps even after a machine fails. Additionally, there needs to be some reasonable number of activates/deactivates allowed.

Thu, Feb 21, 2013 Arthur Dent Madison, WI

So under this new plan I have to buy a new copy of Office when I buy a new computer. This is not good. In the past my software has always been transferable to my new equipment. When the "business model" and "evil plot" become synonymous?

Thu, Feb 21, 2013 ShaneB

I've yet to buy an off the shelf machine so the how is someone like me supposed to deal with it if you're hard drive dies since I don't have a pc manufacturer's warranty?

Thu, Feb 21, 2013 Peter Fry UK

I purchased a FPP office 2013 from Microsoft store uk. It was a shipping option. However, it's now a few weeks since I ordered. Have I been mis-sold!!!

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