Katherine Boehret

A Fresh New Office Finds a Place in the Cloud

Tablets and smartphones may have taken over people’s lives, but Microsoft has managed to maintain a hold on the way many people use their PCs with one product: Trusty Microsoft Office.

Microsoft’s newest version of Office, available starting Tuesday, is a radical change from the past. For starters, Office 365 has a surprising new price model: It is available as a subscription that can automatically renew each year, if you choose. This new system constantly updates program features year round. Every time you open a program in Office, you will be running the latest version.

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With Office 365, any PC can be activated or deactivated in one step.

It’s also more closely tied to the cloud, saving documents to Microsoft’s SkyDrive storage system by default, so your documents and personal settings are remotely accessible. With that, Microsoft aims to stave off Office challengers like Google Drive, which gives people a way to create and store documents online, as well as share documents and edit with multiple people.

What’s more, Office 365 gives people a centralized spot online where they can manage their account, showing them where they have Office installed so they can deactivate unused computers with one click or completely cancel subscriptions. And files are still accessible to download even if subscriptions expire.

Along with these broader features, there are significant changes to Office 365’s programs, which include Word, PowerPoint, Excel, Outlook, OneNote, Publisher and Access. It does a nice job of bringing to the surface some features that were too far buried in menus for people to use. It also packs in many new features, some of which were made for touchscreens and new devices designed to run the touch-centric Windows 8. And Microsoft has updated its Office Web Apps, stripped-down programs that offer free editing, via a Web browser, of files stored online.

I tested Office 365 Home Premium, which costs $99 a year and can be installed on up to five computers, including Windows 7 and Windows 8 PCs as well as Macs running Apple’s OS X version 10.5.8 or later. Office 365 University, which costs $80 for a four-year subscription, is available for college students, faculty and staff. Office 365 for businesses will be released on Feb. 27; subscription rates will range from $4 to $20 monthly.

Traditional, non-subscription versions of Office are available for one-time fees, including Office Home and Student 2013 ($140), Office Home and Business 2013 ($220) and Office Professional 2013 ($400). These new suites still receive security patches, as they always have, and can only be installed on one machine and upgrades require installing whole new versions. Like Office 365, these versions of Office also now save to SkyDrive by default, tying them into the cloud.

I installed Office 365 Home Premium on two devices: A Samsung ATIV Smart PC Pro 700T, which had a touchscreen and was running Windows 8 Pro, and a MacBook Pro, which was running OS X version 10.8.2. I also looked at and edited documents on computers that didn’t have Office 365 installed by using Microsoft Web Apps. And I set up Office 365 on a Windows Phone to access and edit documents on the go.

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The new version of Microsoft Word lets people have integrated conversations in editing comments.

To install on the Windows 8 PC, I used a product key given to me by Microsoft for pre-release testing, otherwise you would have to go to Office.com to buy a subscription and get a product key. (A free 30-day trial is available.) The Windows 8 PC install took about 20 minutes, and a helpful introduction walked me through key points of Office 365. One screen asked me, “How would you like your Office to look?” And I scrolled through a handful of patterns and chose a background that looked like rings on a tree stump.

When I installed Office 365 on the Mac, I just went online to office.com/myaccount, selected an option to sign into an existing subscription and entered my username and password. The download on the Mac took about 30 minutes and then I saw on my Mac the familiar tree-ring background. The version was Office: Mac 2011 because the new Office for Mac typically ships after the new Office for Windows.

The My Account Web page is a big plus for people who have had computers die and take copies of Office with them. Now, in one step on My Account, any PC can be deactivated and a new PC can be activated.

The cloud-based structure of Office 365 takes some adjustment, but users can still save files to the PC. In Word, when I wasn’t connected to the Internet and opened a document, I saw a notification reminding me that the version of the document I was reading was an offline copy. This notification also told me when the document was last updated and saved online. Each Office 365 account comes with 20 gigabytes of free storage, but all SkyDrive users get seven gigabytes each, so a person using Office 365 could potentially have 27GB of storage.

I enjoyed using new touch features, like five small squares on the far right of the Inbox screen in Outlook that made it a cinch to quickly sort through my inbox. These small icons enabled replying, moving, deleting, marking as unread and flagging for follow-up. I wrote this column in the new version of Word, automatically saving it to SkyDrive and easily opening and editing it on other computers and a Windows Phone.

Excel spreadsheets are now smarter than ever thanks to auto-fill features. I tested one that felt like it was reading my mind as it filled in names of people who had appeared in an earlier column because it detected the same name pattern. PowerPoint presentations now include special CliffsNotes-like tools that only the presenter can see.

Office 365 feels grown up and ready for the fast pace of the Web. It’s custom made for people who use many devices, including desktop PCs, laptops, tablets and smartphones. If potential users can wrap their brains around its new subscription system, Microsoft has a winning program on its hands.

Email Katie at katie.boehret@wsj.com.


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