New Office 365 subscriptions for consumers plunged 62% in 2016


Four years after the introduction of Office 365 for consumers, Microsoft last week said subscriptions to the productivity software had reached nearly 25 million.

Subscribers, however, were harder to find last year than in 2015, according to the numbers Microsoft reported: Additions to Office 365’s rolls were down 62 percent in 2016 compared to the year before.

During an earnings call with Wall Street analysts last week, CEO Satya Nadella touted revenue increases for the Office products aimed at consumers—which include Office 365—and of the latter said that the company had, “continued to see an increase in … subscriber base.”

That it did.

. The initial subscription—dubbed “Home Premium”—was a five-user deal that cost $100 annually or $10 monthly. Fifteen months later, Microsoft unveiled a for $70 a year or $7 a month. Since then, Microsoft shortened the original subscription’s name to just “Home;” prices have not changed.

Company executives have never publicly set numeric goals for Office 365 subscriptions. But Microsoft has made no secret about its desire to shift much of its software business model toward recurring payments rather than one-time purchases of “perpetual” licenses, because once bought the software may be used as long as the customer wants.

In each of the last three quarters, Office 365 grew by about 900,000 subscribers, the smallest quarterly increase since early 2014. Prior to the nine-month stretch of 2016, subscribers were accumulating at rates two to three times larger per quarter.