But Microsoft is aggressively pushing the software-as-a-subscription concept, to even out revenue, replace Software Assurance and make good on its promise to become a "devices-and-services" company. Office 365 is a subscription that, for an annual fee, lets each user run Office on up to five desktop and notebook devices, and up to five mobile devices. But if a business stops paying the subscription fee, its employees cannot use Office; it never owns the license, only rents it.
Some enterprises have jumped on Office 365 wholeheartedly, but most have either stuck with their existing EAs and the perpetual licenses acquired through those agreements, or have adopted a hybrid approach, where some users rely on Office perpetual licenses and on-premise servers -- ones running Exchange for email, for instance, and Windows Server for file storage -- while others are tied to Office 365.
Office 365, while giving employees locally-installed copies of Office, offers cloud-based and off-premise email, storage and other services.
Add-ons let companies dip a toe into Office 365, said Blake Gollnick, director of Microsoft licensing at SHI, a New Jersey-based reseller.
"Add-ons are a great way for companies to get involved with Office 365," said Gollnick. "They're not ready to commit to the cloud long-term, they're not transitioning to Office 365 and dropping on-premise licenses, but they can add any number of users they want [to Office 365]. It's a much simpler sales process."
Simpler than moving licenses from perpetual to subscription, anyway.
DeGroot agreed with that. "There's one clearly positive benefit here: There's no minimum purchase requirement, so you can add additional capabilities for just some of your employees, which can be difficult to do in an EA, where by default you license the same capabilities for everyone," he said. "That means that in a regular EA, if you want every capability for some people you have to give them to everyone, even those who don't need it, unless you can negotiate some concessions from Microsoft."
But both DeGroot and Silver wondered why companies would, in effect, pay twice for Office.
"It appears that you can add products, but you don't subtract any on the other side, so you pay twice -- once for the perpetual licenses you have in your regular EA and again for the non-perpetual, subscription licenses in the Add-ons," said DeGroot.
Even Gollnick acknowledged the double payments, although he noted that Microsoft provides partial discounts for Office 365 Add-ons. "But customers are still going to pay above and beyond the on-premises [fees]," he said.
Microsoft doesn't publicly reveal the discounts, saying in its promotional materials only that, "[Office 365 Add-ons] pricing recognizes your existing investments in Office and CAL Suites." It also promised that the biggest customers would get the largest discounts.
DeGroot laid out one scenario where add-ons might prove useful. A company could sign an EA for every worker that included only the bare bones, then use the Office 365 Add-ons to acquire more advanced rights for those that really needed them.
"You can add Office 365 E3, which includes those Enterprise capabilities, to a subset of employees who need them, rather than buying them for everyone," said DeGroot. "But Microsoft isn't willing to let customers choose Office selectively, using Office 365 Add-ons."