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Office 365 Registers Subscription Growth With Slower Gains In Revenue

Written by Sean Holmes

Microsoft has used a ‘rent-not-buy’ marketing model for popularizing its Office 365 editions. Its highly efficient consumer software has gained 1.5 million subscribers in September and by this month, it has achieved 7.1 million subscribers.

Figures Show Substantial Increase In Subscription

The official subscribers for the Microsoft’s Office 365 Home and Office 365 have grown strongly from the 5.6 million in last quarter to 7.1 million in the current quarter. But its revenue seems to be stagnant at around $125 million which is a little more from the last quarter.
Reasons behind the Slower Rate of Growth In Revenue


Dawson speculates that the inability of the Office 365 consumer revenue growth to keep pace with subscription growth might be related to two things. The first one being Microsoft’s strategy of bundling a whole year’s subscription into the sales of certain of devices. This results in growth of the subscription but as the customers are non-paying Microsoft could not register revenue growth. The second reason could be judged from the Microsoft’s use of the word ‘subscribers’ to describe the 7.1 million instead of using ‘users’. Users effectively imply the paying customers, which subscribers do not.

Varying Prices Also Pinches the Revenue Growth

Microsoft has sold only Office 365 Home for a five-license subscription at the rate $99.99 annually and $9.99 monthly to most of its consumers. However, this is available at highly discounted on the Amazon at $63.12 for Home subscription and $44.95 for Personal.

Microsoft has also offered the college students a generous deal on its Office 365 subscription for four year at just $79.99 with licensing rights for two personal computers. This edition is known as Office 365 University and it is considered as a consumer version.

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Sean Holmes

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