The only "cloud" aspects of Office 365 Home Premium and Office 365 University are the SkyDrive online storage -- by default, that's where the Office applications store all the documents you create -- and some of the software delivery techniques, including "Click-to-Run" and "Office On Demand." The former accelerates start time with Office 2013 (though not the Mac edition) by downloading and installing the basics right off the bat, often in just minutes. While you work, the rest downloads and installs in the background. Office on Demand lets you install temporary, virtualized versions of some Office apps -- Access, Excel, PowerPoint, Publisher and Word -- on a Windows PC you don't own, lets you work on that machine with your personal Office settings, then when you're done it scrubs the system of all evidence you were there.
Is Office 365 a good deal?
That's easily the toughest question. Computerworld's analysis last year showed that the subscription was a better deal only if you used four or more of the five Office installs; for one to three copies, it was less expensive over the long run (specifically over the five-year stretch between most Office upgrades) to buy perpetual licenses.
That analysis, however, did not take into account the extras, including the additional SkyDrive storage space; features such as Office on Demand; or even the application selection differences between what's provided by Office 365 and what's bundled with Office Home & Student 2013, the lowest-priced perpetual license. For example, Publisher is not included with Office Home & Student 2013, nor is Outlook. But both come with Office 365. If you require -- or simply want -- those applications, they may be enough to tip you toward a subscription -- even if you utilize just two or three of the five allowed installs.
What's in it for Microsoft with this "rental" concept?
Money. Microsoft already makes most of its money from Office using similar deals with businesses, which typically buy not only massive numbers of Office licenses, but also the right to run any upgrades issued in the next few years. Microsoft wants to move as many customers as possible, including consumers, to that same business model, because subscriptions not only provide regular -- and more easily forecast -- revenue, but also because it's betting that once it makes the initial sale, it will lock in users to a continuing series of payments.
It's no different than a magazine, which would prefer to sell subscriptions rather than single copies from a newsstand (if the latter even exist these days). Or think about it this way: Each time Microsoft rolls out a new Office, it has to once again convince customers to plunk down their money. Not so with subscribers, who simply download a new version when it's released.
I'm not biting. But I may want the new Office. What are my options?
You can buy one of the three retail perpetual-licensed versions of Office 2013 for Windows: Office Home and Student 2013 includes Excel, OneNote, PowerPoint and Word; It can be installed on one PC and costs $139.99. Office Home and Business 2013 includes the above applications, plus Outlook; It can be installed on one PC and runs $219.99. Finally, Office Professional 2013 includes the applications in Home & Student, as well as Access, Outlook and Publisher; It can be installed on one PC and costs $399.99. (Office Professional is the same suite as is installed when you subscribe to Office 365 Home Premium or Office 365 University.)