Microsoft pits Office 2019 against Office 365; its betting on the latter

Dive Brief:

As Microsoft puts more emphasis on Azure, the company is pitting two of its software packages – Office 365 and Office 2019 — against each other, with the former "crushing" the latter, according to Jason Spataro, corporate VP for Microsoft 365, in a blog post.
Office 365 is cloud-connected, uses artificial intelligence, and enables connectivity on any device and coauthoring with non-Office subscribers, Spataro said.
By comparison, Office 2019 delivers traditional Microsoft products, including Word, Excel and PowerPoint, but they are "frozen in time," according to Spataro. The products' features are left out of updates and lack the AI capabilities.

Dive Insight:

In a software showdown, Microsoft "pitted" the Office suites against each other using three sets of twins. The videos have the twins duke it out over the efficiency of products in the dueling Office bundles.

The marketing strategy comes nearly a year after CEO Satya Nadella said cloud-based apps like Office 365 are expected to be "a lot bigger than anything we've achieved." And the natural cloud growth seen by Microsoft is largely due to more pre-built models.

The side-by-side showdown illustrates the capabilities of cloud-connected Office 365 are stronger than its 2019 counterpart. But Microsoft is introducing a competition with itself, as opposed to other software and cloud vendors.

The push for Office 365 is in line with Microsoft's urge for cloud adoption, specifically Azure. However, Office 2019 is available for Windows and Mac users who "aren't yet ready for the cloud to give them the flexibility they need," Microsoft told CIO Dive in an email.

Over the summer, Microsoft introduced changes in its enterprise pricing model, which included a 10% increase in cost for Office 2019 commercial users.

The software as a service model of Office 365 affords Microsoft a steady revenue stream for the length of a subscription. Office 2019, and its prior iterations, however, are one time purchases with licensing restricted to one device.

At the time of the announcement, Microsoft said the changes were conducive with an attempt to be more consistent and transparent "across purchasing channels" as the company moves to a cloud-first model.

The cloud is becoming a standard for many industries and nearly all aspects of digital and technical operations, and Microsoft knows it. Support and updates for Office 2019 will end by 2025, whereas Office 365 updates occur monthly.

The original Office, which debuted in 1988, and Office 365 "seem similar at first glance but are actually pretty different," according to Microsoft. "Over time, we've learned that we needed to provide more guidance to customers on the differences between perpetual versions of Office."