Microsoft Hints at Pricing for Surface Tablet, Office 2013

Ahead of the most anticipated Microsoft product launch in recent history, CEO Steve Ballmer indicated the Surface tablet may sell for $300 to $800, while a subscription to Office 2013 in the cloud will go for $8.33 a month.

Microsoft CEO Steve Ballmer gave the strongest indication yet what the company's new Surface tablet computer would sell for when it comes on the market Oct. 26-between $300 and $800.

In an interview with the Seattle Times, Ballmer addressed the pricing issue in only a roundabout way: "If you look at the bulk of the PC market, it would run between, say, probably $300 to about $700 or $800. That's the sweet spot."

Even so, at least that range narrows the price guessing down from what Internet pundits had estimated it-which was anywhere from $199 to more than $2,000-since Surface was unveiled in June.

The company was more specific about pricing for Office 2013, its widely used suite of productivity software including Word, Outlook, Excel, PowerPoint and other apps. When the new Office was unveiled in July, Ballmer touted its availability in a software-as-a-service (SaaS) model, dubbed Office 365, as an alternative to on-premise.

Microsoft officials said Sept. 17 that Office 365 Home Premium would sell for $8.33 per user per month, or $99.99 annually. The subscription applies to up to five devices-either PCs or Macs-so one family with multiple devices among mom, dad and the kids could share one account. The subscription also includes 20 gigabytes (GB) of storage capacity in Microsoft's SkyDrive cloud and 60 minutes of talk time on Skype.

Office 365 Small Business Premium will sell for $12.50 per user per month, or $149.99 annually. The Small Business Premium is aimed at businesses that have no more than 10 users. Each user could access Office 365 on up to five PCs, tablets or Apple Mac computers. Features also include 25GB of Outlook e-mail storage, 10 GB of cloud storage, the ability to host online meetings and operate a public-facing Web site with no additional hosting fees.

Ballmer's comments on Surface were included in a wide-ranging interview with the Times about what he called "the most epic year in Microsoft history." Besides the introduction of Surface, 2012 is also going to see the launch of the Windows 8 operating system, the Windows Phone 8 OS for smartphones, the first Nokia smartphones running Windows Phone under the new partnership with Microsoft, Office 365 and Windows Server 2012.

But he was also asked about Microsoft's controversial "stack-ranking system" for employee evaluations that was addressed in a critical article about Microsoft in the August issue of Vanity Fair. Under stack-ranking, employees within a work group are ranked relative to each other with some ranked at the top of the pack, some in the middle and some at the bottom. The Vanity Fair article portrayed the process as one that "basically pits employees against each other," as the Times put it.

"I think top talent wants to know that they're going to a company where top talent gets rewarded," Ballmer said in defending stack-ranking. "You always want to have a system that has a chance to recognize people who are doing a great job, a good job, and helping people who are still doing maybe even a decent job, but they're not doing as good a job as the other folks.