Welcome to the new Microsoft Office: It’s got cloud and subscription services

Integration with the cloud, more tablet-focused features and an on-demand subscription version of the service are just a few of the changes introduced in Office 2013, as Microsoft attempts to combat its cloud-based competitors and offer a more flexible service.

Microsoft has also included new interactive features in Office programs, including the ability to import and embed online videos into documents.

This is a make or break year for Microsoft. The company has already announced its new Windows Phone software, Windows 8 for the desktop – and now it’s unveiled a completely new version of the Office suite, based in the cloud.

Office is part of Microsoft’s Business division, which made $US11 billion in operating profit for the first nine months to March 31 – more than half the company’s entire profit.

The previous version of Office was released in 2010, but Microsoft needs to stay on its toes.

Chief executive Steve Ballmer unveiled the new software in front of a packed crowd in San Francisco, saying the new release is “the most ambitious release of Microsoft Office that we’ve ever done”.

“The Office that we’ll talk about and show you today is the first round of Office that’s designed from the get-go to be a service,” Ballmer said.

The software is built into the cloud, and is designed to work on Windows 8 tablets, along with desktop software as well. It’s the first suite that enables much easier document collaboration, and access to documents from any device.

While Office will still be available as desktop software, Microsoft is transforming its Office 365 tools into a subscription service.

There are four different versions:

• Office 365 Home will come with 20GB of cloud storage, so users can save all their files in the cloud. Users will also be provided with 60 minutes of Skype credit. (Skype is integrated across the entire Office range).
• The Small Business Premium package includes the basic Office programs, but adds Access, Publisher, InfoPath and Lync. Each licence covers 10 employees, with up to five installs each.
• Office 365 ProPlus includes 25 user accounts, and five installs per user.
• The Enterprise package includes all the features of Office 365 ProPlus, but adds Exchange Online.

Users will want these subscription services rather than the desktop version, Microsoft argues, as settings will follow you to any device. Apps are “on demand”, which means users can install the app and have it removed whenever they log off.

Apart from a cleaner design keeping in line with the “Metro” theme of Windows 8, each program has more interactive features. You can leave comments on different parts of documents, and allow everyone in your team to work on the same version of a document instead of different copies.

You can also drag and drop pictures, links and videos into your documents as well, to help keep presentations feel dynamic. And one feature users have been calling for – the ability to import and edit PDF content – is now included as well. Users will be able to include video in PDFs as well.

The inclusion of more interactive features is a defence against Google, with its own Apps suite. Microsoft is hoping its more fleshed-out version will keep businesses on board.

It’s a critical year for the company, with Windows 8 coming in October. The ultimate deciding factor will be price – and that’s not expected to be revealed for another few months.

“The Windows 8 launch is right around the corner, and we have a lot to do,” Ballmer said.