Big changes coming to Office, including new pricing

It's been over a year since Microsoft (MSFT) launched its subscription-based version of Microsoft Office, dubbed Office 365. For $100 a year, the suite can be installed on as many as five PCs and also offered other incentives, like additional SkyDrive (now known as OneDrive) storage and 100 minutes of international Skype calling.

One of the selling points of this new software model was that Microsoft could be more agile, pushing improvements to users without waiting for the standard three-year product upgrade cycle. We've seen very little of that kind of agile publishing, though there are finally some significant updates on their way.

Announced recently at the Las Vegas SharePoint Conference, Office will soon include features aimed to improve collaboration and connectivity between users sharing documents within Office. Using a new machine learning technology called Office Graph, Office promises to analyze information in email and documents stored in OneDrive to provide insights to help you work more effectively.

For example, Microsoft contends that Office will understand context and surface conversations, messages, and insights about people and activities that are relevant while you work. These new features will come in part by integrating core aspects of Yammer into Office. Microsoft purchased the Yammer collaboration software in 2012 for about $1.2 billion, and it wasn't clear until now how -- or if -- Yammer would affect Microsoft's core products.

While we wait for these updates to arrive, there's one Office refresh you can experience right now -- a new, lower cost version of Office. Office 365 Personal comes with access to all the usual programs in the Office suite -- Word, PowerPoint, Excel, OneNote, Outlook and even Access. You also get 20GB of additional OneDrive space and an hour of free international calling on Skype. But while the traditional version of Office 365 lets you use your Office license on five computers, the new Office 365 Personal edition works with just one. The cost? $70 per year.

It's an interesting decision. Microsoft is clearly trying to engage users reluctant to spend $100 for an annual subscription by offering a lighter version of the suite, but it remains to be seen if a mere $30 discount will have any effect; after all, is there a significant difference between $70 and $100 for an office suite? Moreover, the suite only runs on a single PC. It's easy to see Office 365 Personal as a far less attractive deal than Office 365 Home, as the $100 a year, five-license version is now known.

And there's a completely free version of Office already available for users unwilling to pay: Office Online (which until recently, Microsoft called Office Web Apps) is a complete Office suite that runs in your browser and even includes some features that you can't get any other way, including the ability to see changes happen in real time as two or more people edit the same document simultaneously (like the way Google Docs works).

The enhanced version of Office 365 with Office Graph and Yammer-inspired collaboration features will arrive later this year. You can get Office 365 Personal today.

Image courtesy of Microsoft