The new Microsoft Office 2013 had recently hit the market, packing Word, Excel, PowerPoint, and more, together with a cloud-based subscription called Office 365.

However, choosing between the locally installed Microsoft Office suite of applications and the cloud-based Office 365 is no longer a tough decision. In fact, users have virtually no decision to make this time.

The new release has turned a comparison between the two versions into simple semantics. In other words, Microsoft has notably packed one version to weigh heavier.

First of all, a clear distinction must be made between the two Office versions. Office 2013, as expected, covers only the desktop applications. Office 365, meanwhile, is a Web-based platform that combines the popular Office applications with cloud storage.

In the past, a mere comparison between the two made it obvious that Office 365 had significantly limited capabilities and features compared to its desktop counterpart. Simply put, those without an Internet connection were left without Office. Now, however, Office 365 has upped its game, and is ready to take the debate to the next level.

Price

In terms of costs, Office 2013 is more expensive than Office 365, and the license only works for one machine. Office 2013 Home & Student, which packs only the core applications (Word, Excel, PowerPoint, and OneNote), costs $140. Adding Outlook to the mix will translate into Office 2013 Home & Business, and the price goes up to $220. Office 2013 Pro throws in Access and Publisher and shoots the price to $400.

Office 365, meanwhile, comes in only two versions: Home Premium and Small Business Premium, which cost $100 and $150 per year, respectively. Both flavors come with the full Office 2013 Pro software for PC, but key differences make things interesting.

With Office 365 Home Premium, up to five users can use the software on up to five devices and each user gets a customized Office experience based on their own Microsoft ID. Office 365 Small Business Premium comes with five licenses as well, but bills it per user per year. This way, each user can install and use Office on up to five machines, but they cannot share licenses with other users. Moreover, Office 365 Small Business Premium also adds a managed Microsoft Bank Office environment that includes Exchange, SharePoint, and Lync.

The only way that Office 2013 would be convenient price-wise compared to Office 365 is if one only needs the core applications in Office 2013 Home & Student, and only needs it on a single PC. Otherwise, Office 365 is clearly the more affordable choice, especially as it comes with more than just Office 2013 for that money.

Cloud Benefits

Office 365 adds several benefits, including an additional 20GB of SkyDrive storage and 60 minutes of international Skype calls per month. Meanwhile, a new feature called Office On Demand allows users to stream virtualized versions of the full desktop software to any Windows 7 or Windows 8 system. Furthermore, with Office 365 users can store their files to SkyDrive and access everything from any other Web-connected device. Lastly, subscribing to Office 365 means always having the latest version of Office available.

Conclusion

Comparing the two versions side by side, weighing the benefits and calculating prices per licenses, it seems that Microsoft has made the decision easier for everyone. Users are free to buy Office 2013, but Office 365 comes along with clearly more advantages, and nearly every scenario paints the cloud-based version as the more financially wise alternative.