Editor's note: This review has been updated with new information regarding stand-alone licenses.
I really like the new Microsoft Office 2013, even knowing there are several free productivity suites available out there. I wouldn't blame you for asking why you would pay for it when you could get a comparable set of office tools from Google Docs and several other services for a lot less or even free. But after using Office 365 Home Premium on both a tablet and a desktop PC for the last few days, I can tell you that there are plenty of reasons to trade up.
A note about nomenclature: there are an enormous number of versions of the Microsoft Office suite available across the home and business categories. You can purchase and download standalone versions with either Microsoft Office Home and Student 2013 ($139) or Microsoft Office Home and Business 2013 ($219). There are additional versions with volume pricing for small and large businesses. But what Microsoft is banking on are the subscription services that have a few more perks, such as endless upgrades as they become available, and still offer most of the same downloadable software. These are Office 365 Home Premium ($99.99 per year) and Office 365 Small Business Premium ($150 per year). There's also a great deal for current students, Office 365 University at only about $40 per year (with a minimum two-year subscription). The pricing breakdown and naming conventions are highly confusing, but ZDNet's Mary Jo Foley tries to make sense of it all here.
Update: Microsoft announced on March 6, 2013 it has changed the license for stand-alone versions of Office 2013. At launch, if you bought Microsoft Office Home and Student 2013 or Home and Business 2013, you would be able to use the suite on only one computer, for the life of that computer. After understandable grumbling from users about the restrictive license, Microsoft has changed it to allow users to transfer Office 2013 to another computer once every 90 days. This way, if you need to buy a new computer, you'll now be able to transfer Office 2013, where before you would need to buy another copy. CNET Blog Network author Lance Whitney has more information about Microsoft's license changes here.
With all that said, what I'm reviewing here is Office 365 Home Premium, and I definitely like what I see -- especially when I can put it on five machines for $100 per year. For starters it's available wherever you are, on whatever device you're using at the time. With full touch-screen support, the entire suite has been reinvented to work with Windows 8-driven tablets and smartphones, making much of the work flow much easier than before regardless of the hardware you're using. Along with a redesigned interface, all of these things come together to make the best Office yet.
Office as a subscription
As I said above, the cloud-connected Office 365 suite comes in separate versions for home and business, with the home version available today and the business version available at the end of February. You can get one of the desktop standalone versions of the new Office, but I don't think it's the best way to experience Office. With today's release, it's clear Microsoft would prefer you sign up for the subscription because the standalone versions won't receive all the upgrades over time that you would get with Office 365 Home Premium. In fact, with a subscription plan, Microsoft says you'll never have to buy another new version of Office again. But whether you choose to pay one time for the new Office or sign up for a subscription to Office 365, you'll mostly get the exact same experience I'm writing about here. It's only later, when Office gets upgraded again, that the standalone versions will become out-of-date.
So why should you get the new Office? In a word: convenience. I'm not just talking about the convenience of continuing to use what you've used before -- I'm talking about the suite itself. What Microsoft has done in this latest version is make Office usable on a tablet running Windows 8 and, in converting the myriad productivity tools to support touch screens, the company had to make most actions only one click (or tap) away. So while it has streamlined the suite out of necessity for Windows 8 and use on tablets, it's now easier to use than ever before regardless of the hardware you're using it on. It's important to note that the software works equally as well if you're running Windows 7, but does not work with earlier versions of Windows. Setting up a subscription for the Mac version will only let you install Office 2011 on five Macs, with updates to the Mac version coming in the next year. In other words, Mac users will see no improvement right now.
On Windows, Microsoft lets you install Office 365 on five different computers with your single subscription, each with its own customizable experience that is tied to each Microsoft account. This means you could be creating a PowerPoint presentation in one room on your account, while your daughter writes an essay in another on hers, and each of you can give the Office apps personalized themes, and each will see the most recent documents tied to your personal account. All of your work is attached to your Microsoft account and backed up to Microsoft's SkyDrive, so you'll be able to access your work anywhere. You can already get 7GB of space on SkyDrive now for free, but with these Office 365 Home Premium subscription plans you get an additional 20GB.
The features that set Office 365 apart from most free offerings are the integration between the apps in the suite and an enormous collection of premade templates to fulfill almost any productivity need. The templates all have a polished and professional look so you'll waste almost no time creating documents from scratch. The suite of apps works seamlessly together -- and with Microsoft's services -- making collaboration, sharing, and communications much easier.
Installing Office is the same whether you bought a standalone copy or signed up for the subscription -- it begins with a quick trip to Office.com. Simply enter the product key you received from the retailer (Microsoft, Amazon, or any of several others) and follow the step-by-step process from there. You'll then download the digital copies of the software in the suite to use straight off your hard drive.
The interface across the entire suite of applications has been reinvented, mostly for the better. First off, the Ribbon, which disappointed many users when it first appeared in Office 2007, remains part of the new Office. But before you start grumbling, consider that Microsoft has made it optional this time around. So now you can show or hide the exhaustive collections of tools across every tab, and decide how much or how little you want to use them. In my review of Office 2010 I liked the Ribbon, but I've heard enough from users who disagree to know that Microsoft has made a wise change.
Aside from the Ribbon, the interface is similar but much simpler than it was in Office 2010 and earlier. Newly added start pages for Word, PowerPoint, and Excel help you get to recent documents attached to your account and new templates immediately upon launch. Flat buttons and plenty of white space make the interface look less crowded. Other interface tweaks are tablet-focused such as the radial menus in OneNote that show options (like sharing, search, and zoom tools) in a circle around the area you press. The general feel of the suite is more streamlined and more cloud-integrated, and the new start pages for the core apps will be especially useful for those looking at the same documents on several devices.