Microsoft quietly tests a new "pay-as-you-go" rental scheme for Office

Summary:Microsoft has been testing quietly a new "pay-as-you-go" rental program for Office 2003 in South Africa, Mexico and Romania, and will decide in the next couple of months whether to extend the program to include Office 2007.

Would you pay $15 a month to use Microsoft Office 2003?

Some users, who are helping Microsoft test whether renting Office might be preferable to buying it for certain groups of customers, say they would.

Microsoft has been testing quietly a new "pay-as-you-go" rental program for Office 2003 in South Africa, Mexico and Romania, and will decide in the next couple of months whether to extend the program to include Office 2007.

While some Microsoft critics have faulted Microsoft for continuing to push Office as a fat-client app (with optional service add-ons) at a time when a number of the company's competitors are advocating that office applications be made available as services.

Microsoft already has been testing a similar pay-as-you-go program for Windows, known as FlexGo, in a handful of developing countries since last May. Under FlexGo, Microsoft and partners -- including AMD, HSBC Bank Brasil, Infineon Technologies, Intel, Lenovo, Phoenix Technologies and Transmeta -- allow users to buy PC usage time using prepaid cards similar to those sold by cell-phone makers in various countries.

In the "Office Prepaid Trial," Microsoft is relying on system builders to sell users cards that provide them three months' worth of Office 2003 usage for a set fee, said Chris Capossela, a corporate vice president with Microsoft's Business division. With FlexGo, an entire PC system -- hardware and software -- is leased; with the Office Prepaid Trial program, only Office (either Office Small Business or Office Student and Teachers Edition) is rented out, Capossela explained.

Under terms of the Office Prepaid Trial, users must return to the system builders who sold them their original PC in order to purchase another three-month incremental of Office-rental time. If a user decides against re-upping, the version of Office 2003 that is on the user's PC goes into reduced functionality mode, providing users with nothing more than the ability to view documents.

Capossela said the four-month-old Office Prepaid Trial has been really successful in South Africa and Romania, but not as well received in Mexico. He said he wasn't sure yet what accounted for the differences in user reception of the trials.

Capossela added that Microsoft will be reviewing some time in the next couple of months the feedback it has received as part of the trial and will decide then whether to extend it to other countries and whether to add Office 2007 to the list of rentable Office SKUs.

Capossela also noted that Microsoft is planning to add Office to its FlexGo pilot program the next time that the company refreshes the products that are part of the FlexGo bundle. Currently, FlexGo covers Windows and PC hardware only. In the next round of trials, users will be able to lease a single bundle including hardware, Windows and Office.

Microsoft's goal with all of these Office trials is to test new ways of generating Office revenues in addition to the existing Office sales channels, Capossela said.

Topics: Microsoft


Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network. Got a tip? Se... Full Bio

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