The new version is called Office 2013. It is available in several variations, some aimed at home consumers and small businesses, others aimed at corporate and education users. For the home user there is Office Home and Student 2013, consisting of Word, Excel, PowerPoint and OneNote. This is priced at £109.95 for use on one computer, making it more expensive than its predecessor (which could be installed on three computers in one household).
Next up is Office Home and Business, which adds the Outlook email/calendar client. This comes in at £219.95. This is a version intended at small business users and the self-employed (note that the Home and Student edition above is not supposed to be used for business purposes). Then there is Office Professional, which adds Publisher and the Access database program. This is a hefty £398; relatively few copies are sold at this price, as most copies of Office Professional are sold via discounted licensing deals to larger businesses.
Most interesting of all is Office 365 Home Premium. Usually, when you purchase a copy of Office it is yours for ever. However, you can now also obtain Office on an annual subscription basis i.e. you are effectively renting it. When Office 2013 is obtained in this manner it is referred to as Office 365. The version for home users - Office 365 Home Premium - contains all the programs found in Office Professional (Word, Excel, PowerPoint, Outlook, Access, Publisher, OneNote) and can be installed on five computers in one household. It also includes additional SkyDrive storage (another 20 GB worth) and 60 minutes of Skype calls. The price? Just £79.99 a year, also payable as £7.99 a month. For households with several computers (most of them these days) this is a great bargain. For instance, if you have 5 computers then the cost of having Office is just £16 per computer per year.
There are additional bonuses with Office 365. Specifically, you can change the computers it is installed on, provided there are no more than 5 at any one time. This is a big improvement over earlier versions of Office Home and Student. With them the software could be installed on 3 computers. However, there was no way to uninstall it and if the computer was replaced then you would lose the licence it had. When you consider that the average lifespan of a laptop is only a few years, it is not uncommon to find households that have had to buy several copies of Office, even though they've only got 2 or 3 computers.
A further exciting feature for Office 365 users is Office On Demand. Suppose you are working at a computer elsewhere that doesn't have Office installed (internet cafe, borrowed computer, friend's house etc). Sign in with your subscription details and you can download a temporary copy. When you have finished using it, the copy is automatically deleted. Nor does the download take forever, as Microsoft use a special streaming process to make it highly efficient.
Although the idea of subscribing to software will seem a strange notion to many people, Microsoft are very keen on the idea and expect it to be more profitable for them in the long term. It also gives them more control over the way in which their software is used. And, provided the prices are competitive, which they clearly are with Office 365 Home Premium, this may be to everyone's benefit.