Microsoft hikes Office 2019 retail prices by up to 10%

The move is seen as yet another push by the company to steer customers to Office 365, which is sold on a subscription basis and is more lucrative for Microsoft long term.

Gregg Keizer Oct 30th 2018

Microsoft raised prices for the retail versions of Office 2019 by as much as 10% when it began selling the application suite earlier this month.

The price increases were similar to those announced in July for commercial licenses sold in volume. Then, Microsoft said that such licenses would cost 10% more than the ones for Office 2016, with CALs (client access licenses) required for applications to connect to Windows Server, Exchange Server and the like, slated to climb as much as 30%.

All these were perpetual licenses, ones paid for with a single, up-front fee, which in return gives the buyer the right to use the software in perpetuity. The licenses, in other words, have no expiration date and users may run the programs as long as they want.

The alternative to a perpetual license is a subscription. Under that model, customers pay monthly or annual fees to run the software. If payments cease, the software will eventually stop working or switch to a feature-restricted mode. Microsoft sells subscriptions to its application software under the Office 365 label.

Office 2019 comes in three retail editions, which can be purchased from online and brick-and-mortar stores.

Office 2019 Home & Student With a list price of $149.99, this lowest-end retail suite did not change price. It includes Word, Excel, PowerPoint and OneNote, comes in versions for either Windows 10 or macOS, and can be installed on only one PC or Mac. The applications do not come with commercial rights, which means they are not licensed for use for work purposes, including at-home work.

Office 2019 Home & Business The $249.99 list price is 9% higher than the same bundle for Office 2016. It includes Word, Excel, PowerPoint, OneNote and Outlook - Microsoft's email client. The suite comes in versions for either Windows 10 or macOS and can be installed on only one PC or Mac. This license does allow for commercial use.

Office 2019 Professional At a list price of $439.99, this top-of-the-line retail SKU (stock-keeping unit) is 10% higher than the 2016 predecessor. It includes Word, Excel, PowerPoint, OneNote, Outlook, Publisher (desktop layout and publishing) and Access (database). Only for Windows 10 -- there is no macOS analogue -- and installable on just one PC, it includes commercial rights.

The last time Microsoft raised Office perpetual license prices was in 2010, with the debut of Office 2010.

Office 2019 price chartIDG Communications/Gregg Keizer

Office 2016 and 2019 prices compared.

Microsoft's price increases were seen as a way to push more customers from perpetual licenses to the rental-like model of Office 365.

"In a perfect world, as far as Microsoft is concerned, all we'd have would be Office 365," said Wes Miller, an analyst with Directions on Microsoft, in a July interview. "It's going to be harder to look at licensing for on-premises using perpetual, versus Office 365, when comparing on purely financial terms," he said, referring to the price hikes.

Microsoft did not dispute that take. In a July 25 blog post, the company said the price changes "will highlight the benefits of our pricing for a cloud-first world." Prices for Office 365 - both consumer- and business-grade plans, remained unchanged.