Microsoft has quietly created and tested a free, ad-supported version of its Office 365 suite, just months after Australian users were slugged with a price hike.

Without any public statement or information on its support pages, Microsoft launched a free version of its Office 365 software suite for select users in India, as first reported by India-based tech news site Beebom.

It allowed individuals to use Microsoft Office services such as Word, Excel and PowerPoint without paying a subscription fee.

Instead, users are presented with a constant banner ad on the right of the page when using these apps, and 15-second muted ads every few hours.

The free version does not allow users to save documents or files locally, instead directing them to save them to OneDrive, with 5GB of storage provided.

A number of features on the apps, including the installation of add-ins, adding of watermarks and the analysing of data, are not available on the free version.

A limited test

The offering of a free, ad-supported version of Office 365 would mark a significant business shift for the tech giant.

Currently, it’s only possible to view documents on desktop without a paid subscription, with no ability to make edits.

But the free version of Office appears to only be available to some users in India, and a Microsoft spokesperson poured cold water on hopes it will be rolled out to Australia and the rest of the world.

“Microsoft has been conducting some limited testing,” the spokesperson told PCMag.

“Currently, there are no plans to launch a free, ad-supported version of Microsoft Office desktop apps.”

Aussie price hike

The secretive testing of the free version of Office comes just months after Australian users of the service were hit with a significant price hike, leading to much anger and attempts to get around the increase in fees.

First announced in November last year, those with a personal Microsoft 365 subscription in Australia had their yearly fee increased from $109 to $159 for a personal licence, and from $139 to $179 annually for a family subscription, a price increase of 45 per cent and 30 per cent respectively.

A family plan allows for up to six users, while the personal plan is for one subscriber.

The price hike, which applied to personal users in Australia, New Zealand, Singapore, Malaysia, Taiwan and Thailand, will come into effect at the next subscription renewal.

Microsoft justified the price increase largely around the new artificial intelligence tools it has now integrated into the Office 365 suite, saying it allows the company to “deliver new innovations for years to come”.

With these tools, users can now create documents, presentations and analyse data using natural language prompts, with generative AI also available in Word and Gmail.

“We understand that our customers have a variety of needs and budgets, and we’re committed to providing options,” a Microsoft spokesperson said earlier this year.

The price increases did not apply to business and enterprise plans in Australia.

Currently a Microsoft 365 Business Basic plan costs $9 per user per month, paid yearly, while a Business Standard plan is $18.70 per user per month.

The premium version of 365 is $32.90 per user per month, paid annually, for Australian companies.