Microsoft Office So Expensive: Why?

Here’s why Microsoft Office is so expensive, apparently:

The primary reason that Microsoft sets its current price points on Office is to make money.

They invest heavy resources into the development of Office software, and the company wants to turn a profit. 

That said, the actual price of Office varies widely depending on your license, and it isn’t always expensive.

So if you want to learn all about whether Microsoft Office is as expensive as it seems, then you’re in the right place.

Keep reading!

Microsoft Office So Expensive: Why? (+ Get It Cheaper)

How Much Does Microsoft Office Cost?

Spreadsheet document information on laptop screen.

The price of Microsoft Office depends on many factors. There are different pricing tiers, marketed audiences, and purposes.

That all goes without even mentioning that Office comes in larger and smaller packages, including or excluding particular software options depending on the pricing tier.

For the most part, Microsoft encourages subscription-based pricing. They have two common groups of subscriptions.

One is aimed at home and family use; the other caters to business licensing.

The lowest business license starts at $5 per user per month.

So, if a company needed to have 5 users for a whole year, that company would pay $25 each month or $300 each year.

There are more expensive tiers of business licensing available that go as high as $20 per user per month.

These higher tiers come with more software in the suite, more options with the software, more support, and other features.

As for home and family licensing, it starts at $70 per year. This is a one-user license that is not intended for business applications.

There is a family license that supports up to 6 users for $100 per year.

Each of these subscriptions is available at a monthly price, but the annual cost is elevated slightly if you choose a monthly subscription.

To be clear, Microsoft license agreements forbid the use of home and family software for business purposes.

If you make a profit using Microsoft software, you’re supposed to be using a business or commercial license.

While these are the standard subscriptions, there are many other options available.

For instance, you can get free versions of Word on the Google Play Store and the App Store. 

There is also a free online version. All of the free versions are watered down and offer fewer total features.

You also cannot access all Office software with these free versions.

Still, for the low cost of a free Microsoft account, you can use the software.

Microsoft will frequently try to convince you to pay for upgrades, but it is never required (at least at the time of this writing).

All of this is to say that Office is not always expensive. It really depends on the circumstances.

Why Does Microsoft Charge So Much For Microsoft Office? (3 Reasons)

Cup of coffee, notebook, smartphone, laptop with financial documents on keyboard

Ok. Now you have an idea of Microsoft’s pricing models for Office, and it can get pricey.

Especially for large businesses, it can be a source of frustration to keep up with the costs. 

The next natural question is why?

Why does Microsoft charge so much, especially when there are so many free alternatives?

Mostly, Microsoft sets the prices because people keep buying the software.

But, there are some direct rationalizations for the current pricing scheme.

#1 Powerful Software

The full Office suite includes a lot of software, and each program is reasonably powerful.

Some of it handles productivity, but other parts of the suite are geared towards networking, collaboration and professional presentations, among other things.

More to the point, Office has been the flagship for word processing and spreadsheets for decades.

People recognize names like Word and Excel, and having proficiency with these particular programs can even improve your employability.

So, Microsoft is charging to cover the expense that they put into developing the software.

It’s also worth pointing out that Microsoft’s primary source of revenue is selling software, and Office is one of its top sellers.

If they were to try to offer a free Office package beyond what is already available, the company would have to completely re-envision the entire business model.

#2 Cornered Market

Business people working in the meeting room

The biggest reason that Microsoft charges so much is that they can.

Microsoft long ago cornered the market on government software contracts.

That made the software extremely popular in a large number of workplaces. 

On top of that, in order to make things compatible with government forms or protocols, many businesses and individuals had to play ball and use Microsoft software.

This is one of the reasons why Windows became the most popular operating system for personal computers, and it extends perfectly to the Office suite.

For a long time, if you wanted others to be able to read or work with your documents, they had to be made with Office software.

This is compounded when you consider that government contracts can include schools.

For a while, virtually every school in the United States was using Microsoft software, especially Word, Excel, and Powerpoint. 

This exclusivity made Office so popular and standard that everyone felt compelled to follow along.

Since people more or less had to use Office, Microsoft could get away with charging more for the software than competitors might.

These days, free alternatives have cut into the market share, but the Microsoft legacy lives on. It takes a long time for such a near-total monopoly to relinquish popularity to new options.

Many individuals and businesses stick with Office because it is what they know. They’ve probably also budgeted for it.

In short, Microsoft charges as much as they do for Office solely because of its long-term popularity.

#3 No Ads

Woman working online on laptop at night.

Ads are something else to consider.

A lot of free stuff on the internet is paid for by advertising.

When you watch free videos on YouTube or any other player, it is ultimately ad revenue that pays for the infrastructure.

The same is true for some Microsoft Office competitors. They don’t charge you to use the software, but you get hit with ads.

You’re trading the cost of the software for the quality of your user experience.

Meanwhile, the paid versions of Office don’t include any advertisements by default.

You might argue that Google and Apple productivity suits don’t include ads. That’s usually true, but it’s a little more complicated. 

For instance, Google reserves the right to sell user data. That is ultimately how they pay for free G productivity software.

Apple brings a different approach to the table. Their productivity software is only available on Apple hardware (unless you violate the terms and conditions). 

Apple covers the cost of giving away free software with its hardware pricing.

Basically, Pages, Keynotes, and the rest are baked into the cost of an iPhone or MacBook.

How Can You Save Money on Microsoft Office? (3 Ways)

Piggy bank savings

Microsoft Office can get pretty expensive. It always helps to find ways to save money.

If you absolutely have to use Office for any reason, you might be looking for potential discounts.

You’ll find a few below. Alternatively, you can look for software to supplant Office.

You’ll find some recommendations in that department as well.

#1 Student Licenses

Cheerful student working on laptop at home

Student licenses have been around almost as long as Office itself.

Pricing has changed many times over the years, but there has always been at least some sort of discount available for individuals who can demonstrate that they are current students. These days that is extended to teachers.

At the time of this writing, Office is completely free for students and teachers.

It might remain that way, but the level of discount available for student licenses has ebbed and flowed over the years. There is no predicting if and when student pricing will change again.

#2 Free Alternatives

The easiest way to save money on Office is to avoid paying for it at all. There are plenty of free alternatives.

For starters, you can stick with the free versions of Office. They are available online or through mobile app stores.

If you want to get away from Microsoft software, you can look into other free options.

Apple has free productivity software called iWork on all of its devices. 

The Google Workspace is available as long as you have a Google account.

You can also explore Open Office and other Office clones that don’t charge for access.

#3 Third Party Keys

Another way to try to save money is to purchase Office at a discount.

Before you go this route, a disclaimer is necessary. There are legitimate third parties that sell real keys. 

There are also scams. 

You are on your own to tell the difference.

Even with legitimate companies, there is a risk of a key failing to work, and your recourse in that situation may be limited.

With the disclaimer out of the way, there are legal resellers who sell Office at a discount.

Usually, this is a consequence of bulk ordering. 

Companies that build computers or supply Mircosoft Office to employees might purchase access in bulk.

If they end up with extra keys, they often try to sell those keys to recover some of the investment.

You might buy a key from such a company directly. More likely, you’ll run into a middleman of sorts. There are businesses that specifically try to buy these leftover bulk keys and then resell them. 

Ultimately, these keys are sold cheaper than a purchase directly from Office, but the level of savings will vary.

Why Are Docking Stations So Expensive?

So much about docking stations’ prices.

Have you ever wondered about the price tags of docking stations?

The price of a laptop docking station will largely depend on the features available and its overall quality. 

Docking stations provide more support for the laptop than USB hubs, but they are more expensive to make. 

Still, docking stations can cost anywhere from tens to thousands of dollars.

Learn all about why docking stations are so expensive here.