Microsoft has made a fairly drastic change to licensing for Office 2013. In previous versions, a license was transferable and you were also allowed to install a second copy on a portable device such as your notebook.

With Office 2013, the standalone package is licensed per machine, period, and is not transferable from the original machine on which it was installed. You will now have to buy two separate licenses for your desktop and your notebook.

And if your PC catches fire or your notebook gets run over by a dump truck, tough luck. The only provision they have for getting a replacement license is if the original PC fails while under warranty. Otherwise, you will have to buy a new license.

The standalone Home and Business edition (Word, Excel, OneNote, Outlook) is $220. The Professional edition (adds Access and Publisher) is $400. There does not appear to be any upgrade pricing. So in our case with two users, one desktop and one notebook each, we would be looking at $1600 to upgrade from Office 2007. That's a lot. Ain't gonna happen.

But wait, there's an alternative. You can get Office 2013 via Office 365 subscription, Microsoft's answer to Google Apps.

The Office 365 Home Premium edition includes all the Office apps, 20GB of SkyDrive storage, and 60 Skype minutes per month for $10 per month or $100 per year. You can install it on up to 5 PCs, Macs, or tablets for that one low price. That's very reasonable, but there's a catch: it's licensed for "non-commercial use" only.

For business/commercial use, there are several flavors of Office 365 for Business. It has not yet been updated with Office 2013, but will be soon according to Microsoft.

There is a full desktop Office Professional (currently 2010) subscription plan for $12 per month per user that allows up to five devices per user. There is an Office 365 Small Business plan (P1) for $6 per month per user that includes email and a limited selection of web-only Office apps. For $20 per month per user, the Midsize Business and Enterprise plan (E3) includes the full desktop version of Office Professional (currently 2010) for up to five devices per user plus a bunch of other stuff like hosted voice mail.

So our equivalent cost for an Office 365 subscription to upgrade our existing Office 2007 licenses would be $288 per year (for the basic Office Professional subscription). We only upgrade Office about every four years. The last time was about $600-$700 for two licenses for four machines (one desktop and one notebook each). So the subscription would be more expensive under the old pricing, but with the new pricing of $1600 for the same thing we would be better off with the subscription, I guess.

What we will probably do is keep running Office 2007 until it no longer works, then switch to Libre Office or something. We rarely share Office documents with customers or business partners any more, and anything we distribute is in PDF format.

This might not be an option for most companies, though, who have large Office document libraries and do a lot of collaboration and document sharing. In that case the E3 $20 per month per user option is not too bad of a deal, especially if you can ditch Exchange Server and use Office 365 mail/document sharing servers with Outlook and SharePoint or whatever it is. I'd almost be willing to pay that just to get rid of the major PITA that is Exchange, especially since we barely use any of its features except email.

Confused yet? I am. And so are a lot of other people.