Microsoft has told business that want to lock down Office 2016 so they don't receive a constant churn of changes to purchase old-school perpetual licenses rather than subscribe to Office 365.
Office 365 -- actually the core of the subscription service composed of the locally-installed applications like Word, Excel and Outlook -- will offer a "Current Branch" and a "Current Branch for Business," just as does Windows 10. Current Branch (CB) for Office will update monthly and potentially include new or improved features, security patches and non-security bug fixes. Meanwhile, Current Branch for Business (CBB) will issue updates every four months, with the same potential content. In the months that Microsoft does not deliver a CBB update, it will issue only security fixes to customers who adopt the branch.
Some Office 365 customers will be able to use only the CB: Those include organizations that have subscribed to Office 365 Business and Office 365 Business Professional, plans that cost $8.25 and $12.50 per user per month. Firms that subscribe to the pricier Office 365 ProPlus, Office 365 Enterprise E3 or Office 365 Enterprise E4 plans may opt for the CBB track. Those plans run from $12 to $22 per user per month.
But Office 365's missing one update track available on Windows 10: Long-term servicing branch (LTSB), the most restricted available, and then only to customers with the top-tier Windows 10 Enterprise. LTSB eschews all but security patches for extremely long stretches -- up to 10 years if the customer wants to squat on a build that long -- so that feature and functionality changes, and new user interface (UI) and user experience (UX) elements, don't reach the devices.
LTSB, in other words, minimizes feature and UI churn on Windows 10.
Office 365 lacks a Microsoft-defined and -driven LTSB. Subscribe to Office 365 and change is mandatory for all. The only question is when users receive -- and must install -- an update or upgrade.
To plug that no-LTSB hole, Microsoft recommended that customers forsake subscriptions and instead stick with Office's old-style licensing model. Pegged with the label "perpetual," those are the licenses that are paid for up front with rights to use the software as long as the customer desires. The only real halt is the end of the decade-long support.
"Office Professional Plus 2016 client installs (using MSI files) is good for scenarios where maximum control is required and the device has limited Internet access," a Microsoft support document stated when comparing tracks available for Windows 10 and Office 365.
Professional Plus 2016 is the top-of-the-line "one-time" license -- Microsoft prefers that term to "perpetual" -- for Windows, and is available only to enterprise customers who purchase five or more licenses using a volume agreement. Those are the firms and organizations that prefer to license Office in a non-subscription fashion. (Other SKUs, or stock-keeping units, including Office Standard 2016 and Office 2016 for Mac Standard, are also available in perpetual form via enterprise agreements.)
Microsoft has not disclosed how or when it will update Office 2016 perpetual licenses, but the process will clearly not be identical to the suite obtained through an Office 365 subscription. One-time licenses are unable to adopt the CB or CBB tracks, for example.
The support document's recommendation means that one-time licenses will be treated as they have in the past -- with security patches and bug fixes only.
In the same document, Microsoft spelled that out. "Security updates are made available for the Office clients that you install by using .MSI files as part of the Office Volume Licensing program," Microsoft said. "New features are not delivered outside of full product releases. Recommended for devices on the Long Term Servicing Branch of Windows 10 [emphasis added]."
Essentially, Microsoft's making lemonade out of lemons. Because Office 365 omits an LTSB-like update/upgrade track, it's using Office Professional Plus 2016 to fill that purpose.
It also means that perpetually-licensed Office will remain part of Microsoft's line-up for the foreseeable future, at least for businesses.
Wes Miller, an analyst with Directions on Microsoft, agreed. "I don't see the on-premises perpetual licenses going away anytime soon, that is, we'll see several more iterations, at least 2-3 major versions, if not more," said Miller in an email reply to questions.
Microsoft is, and has been, giving the edge to Office when delivered from an Office 365 subscription. Even the major upgrades Miller referred to -- say, an "Office 2019" three years from now -- will not match what's offered to Office 365 subscribers in the meantime. That's in keeping with Microsoft's long-running scheme to make Office 365 more attractive than perpetual licenses by regularly refreshing the applications on an accelerated schedule from a subscription.
"We're already seeing many instances where the features that arrive on-premises are much more limited, and the rights in Office 365 are much more broad," Miller added. "So while you're going to get rights to these new versions [if you pay for Software Assurance], they won't have as much as the hosted versions. There'll be multiple layers of incentives that start to make hosted more logical for many businesses."
Software Assurance (SA) is an annuity-style program that volume license customers can add to their payments; SA gives a company the right to upgrade to the next version of, in this case, Office, in return for flat-fee payments over a two- or three-year span. Many enterprises with one-time Office licenses purchase SA so they can migrate to the newer version when it releases, even though some licensing experts recommend dumping SA.
Microsoft would not state outright that it will do a follow-up to Office 2016 in a one-time license format. "We're always evaluating our product portfolio, but we don't have anything new to share today," a spokeswoman said when asked whether Microsoft would commit to continuing Office perpetual licenses. "Our customers' needs will continue to guide any future product decisions."
Consumers are in somewhat the same boat as Microsoft's commercial customers, in that they can only block changes to Office 2016 by purchasing a one-time license and ignoring Office 365. Subscribers to Office 365 Home and Personal, the $100- and $70-per-year consumer plans, will begin to be automatically updated to Office 2016 this month.
Consumers on those plans will be on the CB brand -- no option for the CBB -- and so will receive changes each month that must be applied before the next month's CB comes out.
Buying Office Home & Student 2016 ($150) or Home & Business 2016 ($230) for either Windows or OS X, or Office Professional 2016 ($400) on Windows only, will be the only way for consumers or very-small businesses to lock down their suites.