Big push ... Microsoft CEO Steve Ballmer gives his presentation at the launch of Microsoft Windows 8.

Photo: AP

With the launch of Office 365 Home Premium, Microsoft is offering month-by-month subscriptions for home users.

Subscription pricing models have always been attractive for businesses but now they seem to be the way of the future for many consumer products and services. Large businesses have enjoyed this kind of flexibility for a while when it comes to paying for Microsoft Office, but today's launch of Office 365 Home Premium brings subscription pricing to home users. Keep in mind this is for "non-commercial use" and there are different plans for business users.

It's great to see Microsoft finally offer such flexible pricing models for home users, but are they a good deal? 

For $12 per month or $119 per year, Australians can install Office 365 Home Premium on five computers, which can be a mix of Windows and Mac. This isn't a stripped-down, browser-based Office suite such as Google Docs. You get full Office 2013 versions of Word, Excel, PowerPoint, Outlook, OneNote, Publisher and Access to install on your computer as if you'd purchased them outright. Microsoft also throws in access to basic, family-friendly collaboration tools.

To sweeten the Office 365 deal, Microsoft throws in 60 minutes worth of Skype calls, an additional 20GB of online SkyDrive storage and "Office on Demand" which lets you run full versions of Office programs on any PC via the internet. It's also compatible with Office Web Apps so you can edit your documents in a browser.

One advantage of the subscription model is that for no extra cost you can upgrade to the next version of Office when it is released, rather than holding out with an old version of Word and Excel -- as many people tend to do when they've bought Office outright. The downside is that if you stop paying your subscription the Office applications switch to read-only mode.

It's great to see Microsoft finally offer such flexible pricing models for home users, but are they a good deal? It really depends on which applications you need and how often you intend to upgrade to the latest version. Home users can still buy Office 2013 outright, although only with a single-PC license. You'll pick up a one-PC copy of Office Home and Student 2013 for less than $169, which lacks Outlook, Publisher and Access -- applications which home users might not care about.

If a single copy of Office Home and Student 2013 meets your needs and you're happy to keep using it for at least two years then it works out more economical than an Office 365 Home Premium subscription. Of course if the basic Office Home and Student 2013 meets your needs then you should also consider whether a free alternative such as OpenOffice might fit the bill.

What's really frustrating is that Microsoft has abandoned the three-PC Family Pack available for previous versions of Office, obviously in an effort to push households towards the subscription model. If you're looking to install Office Home and Student 2013 on two computers for three years, then buying two standalone copies works out about the same as an Office 365 Home Premium subscription. If you want to install it on more than two machines then a subscription is probably the best deal.

Does an Office 365 Home Premium subscription make sense for your household?