Is Microsoft Office 365 priced right for New Zealand?

Microsoft launched its web-delivered Office 365 in New Zealand earlier today.

Clearly the software giant intends to compete with Google Apps. But at NZ$9.25 for the basic individual user plan, Microsoft’s online software suite is priced well above Google’s US$50 (NZ$60) annual charge. And many Google Apps users get by without paying a penny.

Microsoft understandably wants a return on the investment it has made developing Office 365 and installing the hardware to run it. The company has performed badly recently and its desktop Office product line is a much needed cash cow.

So is NZ$9.25 – or A$7.90 in Australia – the right price for the market?

Microsoft Office is better software

When it comes to functionality and ease of use, there’s a gulf between Office and Google Apps. Microsoft’s software is vastly superior. Google’s web apps have their place but they are a touch undercooked for serious users.

My personal experience using the two product lines is instructive. I tried switching to Google Apps for a fortnight as a test, but gave up before the first day was out. My productivity plummeted when I tried using Google Docs instead of a desktop version of Microsoft Word 2010. I learnt Google Docs doesn’t cut the mustard as a sensible tool for journalists.

In some ways Microsoft’s online version of Word is better for my needs than the desktop application. There’s less bloat, less to worry over, less unnecessary fannying about. Microsoft hasn’t removed anything I care about.

Office 365 even better for medium-sized companies

I work from home – sometimes on the run as a journalist – so the main advantage of Office 365 doesn’t help me. However a medium-sized business switching to the online software can eliminate servers and infrastructure. They’ll have less need for support staff. That’s a huge financial saving straight away. And it means fewer headaches.

Microsoft is asking New Zealanders and Australians to pay a premium for Office 365 over the US$6 (NZ$7) monthly fee Americans pay. That’s annoying. Shrink-wrapped copies of Microsoft Office 2010 sell for a shade over NZ$300 a pop, that’s roughly three years of Office 365 subscriptions. On that basis the price seems reasonable. Google App fans will think otherwise.