In line with rumors, Microsoft (MSFT -1.94%) just launched Microsoft 365 for consumers, a new subscription offering that is basically a rebranding of Office 365 consumer plans. The new Microsoft 365 plans will have the same price points as the existing Office 365 tiers -- $7 per month for a Personal plan or $10 per month for a Family plan -- so the software giant is really just hoping that by adding more features it can pack in more value in to grow the subscriber base.
Here's what investors need to know about Microsoft 365 for consumers.
More apps at the same price
The two most notable additions are a Family Safety app and repositioning Teams as a consumer chat app. Family Safety allows parents to physically keep track of where people are while adding digital safety features that log how much time is spent on devices. Think of it as a combination of Apple's Find My and Screen Time apps. Family Safety can send push notifications when family members arrive at or leave certain geo-fenced locations and will provide screen time reports.
Microsoft's Slack (WORK) competitor, Teams, has been an enterprise product to date. The COVID-19 pandemic has created a surge in use of many communication-oriented apps, including Slack and Zoom Video Communications, and Teams is no different. On the enterprise side, Teams now boasts 44 million daily active users (DAUs), adding 12 million DAUs in a single week earlier this month due to the coronavirus outbreak driving more remote work.
The company wants people to use Teams as a way to connect and organize personal events like "a neighborhood gathering or your next book club meeting." Slack CEO Stewart Butterfield has noted that Slack's free tier is popular for these types of personal use cases, and the company has little to no intention of trying to monetize that engagement since those efforts would likely be futile. Still, that usage helps expand awareness of the platform and those people "tend to introduce it to their companies." By bundling Teams into a paid consumer subscription, Microsoft may actually be able to better monetize those types of scenarios than Slack.
In addition to these two new apps, the core Office productivity suite that underpins it all is also getting new features like a beefed-up Editor feature in Word that uses artificial intelligence, a new Money functionality in Excel designed to help manage personal finances, and more.
Microsoft has done a good job in growing Office 365 for consumers, quadrupling its subscriber base over the past five years. But growth has started to decelerate in recent quarters, and Microsoft 365 for consumers could reinvigorate those gains.