Microsoft Office licensing – a gift to free software?

Francis Sedgemore, Thursday 21 February 2013 at 18:16 UTC

Current discussion of Microsoft’s licensing model for the latest versions of its Office software is even more contemptuous than usual, with CEO Steve Ballmer likened to a bald sweaty baboon with few social graces. To be fair, as journalists are supposed to be when reporting on the pseudo-religion that is consumer electronics, Apple chief’s Tim Cook has his share of detractors, but cries of “What would Steve [Jobs] do?” and the associated argy-bargy are nothing like the vitriol and bile we get with anything related to Microsoft. That company remains the epitome of digital evil, with the upstart Google running a close second.

Consumer technology marketing has become dependent on churnalism, faux reviews, and the blog rantings of gadget-addled disciples with rigid tribal allegiances. It’s all Windows vs Mac, iPhone vs Android, Linux vs real people who care not what goes on under the hood.

Without product rumours, many of which were likely initiated by leaking hardware manufacturers testing and manipulating the market, and absurd debates concerning the relative merits of mobile phones, operating systems, software applications and the minimum amount of memory required for a laptop to be described as “pro”, far fewer folk would give a thought to gadgets that in six months will either be landfill or flogged off on Gumtree for a pittance.

Now and then the tech bloggers latch on to a story with legs, and proper journalists are left behind. This may be the case with the licensing of Microsoft Office 2013 and its annual subscription-based alternative Office 365, which were recently released following the launch of the tablet-centric Windows 8 operating system.

The licensing of proprietary software has tended to follow a purchase/lease model, in which a particular version of the software is ‘sold’ to users, with updates provided either free of charge or for an upgrade fee. Software vendors try to control the use of their product by insisting in End-User Licence Agreements – legalistic contracts to which users assent on breaking the seal – that they continue to own the software. This may be why Americans cannot spell the word “licence” in anything other than its verb form.

Authorities in the US accept Microsoft’s interpretation of software licensing, but this does not comply with EU law. The problem is that there is insufficient legal precedent with which to settle the matter, and American software suppliers have so far not attempted to enforce in Europe those terms within their EULAs that are contrary to EU consumer protection legislation. The whole thing is a mess, and the software end-user doesn’t know where she stands.

Previous versions of Microsoft Office, such as Office 2010 on Windows and Office 2011 for Mac, have followed the traditional licensing model, though there is a catch with the most popular version of Office 2010, known as a Product Key Card. If you purchased Office 2010 in DVD form, the licence may be transferred to either to a new computer of one’s own, or to another as a second-hand gift or resale. Buy an Office 2010 Product Key Card, say for a new computer with an unlicensed copy of Office pre-installed, and you have no licence transfer rights.

That is the theory, but from personal experience I can vouch that transferring an Office 2010 Product Key Card is allowed in practice. Or at least it was for me, and I can say the same for a number of other EU residents of my acquaintance. I’m aware that Microsoft has leaned on Amazon to forbid the sale of second-hand Office software, quoting piracy risk as the reason, but this is no more than standard market manipulation.

Office 2013 has a traditional perpetual licence, but the terms have been clarified to a degree from those of Office 2010. Going by a blog post on Tuesday of this week from Microsoft’s Jevon Fark, the company is now emphasising that licence transfers are forbidden, even when they are from a broken computer to a replacement machine owned by the same individual or corporation.

The whole point of this licensing shift is to deprecate the concept of a perpetual software licence, what with its ambiguities as to ownership and leasing rights, and instead encourage users to take out a subscription to Office 365. Microsoft’s pricing model reinforces this attempt to shift purchasing behaviour, and the result will be a greater lock-in of consumers.

Will Microsoft’s licensing strategy work? I am a journalist rather than a market analyst who makes things up as he goes along, and I’m therefore hesitant to forecast what will happen with Office 2013 and Office 365. But I will say that it could provide an opportunity not to be missed for free and open-source alternatives to Microsoft products.

LibreOffice, which is what I use, has come on leaps and bounds in the past few years, and irrespective of cost I prefer it to Microsoft Office. The LibreOffice user interface could do with bringing into the 21st century, but under the hood it is a solid software suite. LibreOffice uses the international standard known as ODF as its default file format, but it can handle Microsoft Word and PowerPoint documents with few formatting glitches. That may not be good enough for some, and complex Excel spreadsheets are a problem, but the same issues can arise when opening Microsoft Office documents created with one version of the software with another version.

Open-source office packages such as LibreOffice have corporate backing, but the marketing leaves much to be desired. If open-source software suppliers make a serious push in the market for office software, at a time when Microsoft and hardware manufacturers are struggling with Windows 8 and overpriced and underpowered convertible touchscreen laptops and tablets, Microsoft’s dominant position in the office software sphere could be compromised.