Microsoft is currently testing a free version of its Office applications for Windows, which includes advertisements. Previously, users needed to subscribe to Microsoft 365 to access the full desktop version. The ad-supported version has recently appeared in India, allowing users to utilize popular applications like Word, Excel, and PowerPoint without a subscription fee. However, this version features ads on the sidebar and includes limitations in functionality, such as the absence of certain tools in Word and Excel. Notably, users are required to store documents on OneDrive, as local file storage is disabled. Although a Microsoft spokesperson indicated that there are currently no plans to launch this version widely, the company has made significant adjustments to its Office applications to accommodate ads, suggesting that it may expand to more markets in the future.
Why do we care?
Microsoft’s ad-supported Office for Windows marks a shift in its monetization strategy, blending free access with advertising. This test—currently in India—suggests Microsoft is exploring new ways to reach users who might not subscribe to Microsoft 365. By offering a free desktop version of Word, Excel, and PowerPoint, Microsoft could attract more users into its ecosystem, particularly in price-sensitive markets.
The requirement to store files on OneDrive is also notable. This locks users into Microsoft’s cloud services, reinforcing the company’s push toward a subscription and cloud-driven model rather than traditional software licensing. If widely implemented, this could drive higher adoption of OneDrive and boost user dependency on Microsoft’s ecosystem.
I’m torn – this could be a micro-business savvy opportunity for providers if it moves beyond India, or it could be a gross lock-in and ad-filled workspace.
