Whatever happened to Office subscriptions?

Whatever happened to Office subscriptions?

Summary: A long time ago, at a tradeshow that no longer exists, Microsoft made a Big Deal out of its announcement that the next version of Office would be available by subscription. They even put out a press release to mark the occasion. But that was the last sign of the concept. What happened?

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TOPICS: Microsoft
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A long time ago, at a tradeshow that no longer exists, Microsoft made a Big Deal out of its announcement that the next version of Office would be available by subscription. They even put out a press release to mark the occasion:

Microsoft Corp. announced a new subscription offering for "Office 10," the code name for the next version of Microsoft® Office, which will provide customers with an exciting new opportunity to subscribe to the world's leading desktop productivity suite for an annual fee. This new model will enable home and small-business customers to acquire the latest version of Office at a lower initial cost while receiving product upgrades released during their subscription at no additional expense. Customers will be able to obtain their subscription via a new packaged product at retail stores in select worldwide regions when "Office 10" becomes available toward the end of the first half of 2001. The subscription can be renewed annually via telephone or over the Internet, or by acquiring a new subscription product at retail stores.

That version of Office turned into Office XP, which was released to manufacturing in March of 2001. But the subscription offering, which was tested briefly in Australia, New Zealand, and France, never saw the light of day. So what happened?

The concept of software as a subscription service was once very popular. Today, at least in Redmond, the concept appears to be radioactive. A Knowledge Base article about the end-user subscription license program is still available at Microsoft's Help and Support site, but other than that, I can't find any references to the concept since that 2001 announcement.

If you thought that this week's introduction of Office Live marked the rebirth of this concept, you're not alone. As Microsoft's Robert Scoble pointed out yesterday, it's a triumph of bad branding: 

Office Live isn’t what you think it is. It wasn’t what I thought it was (I was thinking it’d be an internet version of the Office Suite like PowerPoint, Excel, Word). It’s not. Get that out of your mind. And damn the marketers who are extending the Office brand.

Jupiter Research analyst Joe Wilcox goes out on a limb with this prediction:

Office Live absolutely is not a hosted version of Microsoft Office. People have asked me if Microsoft is hosting Office applications or would do so in the future. Answers are no and highly unlikely. I don't expect Microsoft to offer a hosted version of Office as part of Office Live. Ever. While Microsoft obviously is concerned about the Web 2.0 concept, the company is not going into the hosted applications business.

Joe's absolutely right as far as Office 12 is concerned. If there were any plans to make Word, Excel, and the gang available as Web pieces, we'd know it already. But the shift to completely XML-based formats means Office on the Web would be a lot easier to offer. And I'd be amazed if those options weren't under active development right now. Office 13 Web Edition, anyone?

Topic: Microsoft

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7 comments
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  • Outlook is available on a subscription basis

    Ed: Last January, Microsoft did make Micorosft Officle Outlook Live available. The annual subscription, users can download a special version of the Outlook 2003 e-mail client to use in conjunction with their Hotmail accounts. The Outlook Live service also syncs e-mails, contacts and calendars between the Outlook client and Hotmail's servers. This package costs $59.95 (reduced right now to $44.95) a year and users receive 2 GB of online storage, and spam and virus protection. The copy of Outlook included can also be used for connecting to other POP3, IMAP or Exchange Server accounts.

    http://join.msn.com/?page=outlook/olc
    morchant
    • Not exactly the same thing

      What you're really paying for here is a hosted email service (Hotmail based) with a synchronization module that works with Outlook, right?

      And it's a pretty terrible deal, too!
      Ed Bott
      • Not such a bad deal really

        What you're paying for is a licensed copy of Outlook for your PC combined with a hosted e-mail account and synchronization between the two. Given that a copy of Outlook is around $100 retail (yes, I know it can be found for a bit less than that), I don't think it's a bad deal, especially since it includes upgrades. So... not quite the same as a web-based office suite or application on a subscription or SaaS model but it is the only component of Office that they've hybridized in this fashion.
        morchant
      • hosted subscriptions yes; standalone - no

        Microsoft offers several products as subscription based services but only when used in conjunction with hosted services.

        For example - we offer Microsoft Exchange hosting and with that we are authorized by Microsoft to include a license for Outlook 2003 for each user. The license is a download of the full Outlook 2003 installer but the legal limitation is that it should only be used as long as the client is an active customer of ours.

        Microsoft also offers monthly licenses for the whole Office suite and other products so theoeretically we could offer hosted desktops using Citrix, Windows Terminal Server, or Virtual Machines but no clients have expressed any interest.

        I believe that software subscriptions, after the initial fad interest, morphed away from the original idea of making all software available on a permanent monthly/yearly fee and converged on the hosted/online software subscriptions services. First CRM (Siebel, Salesforce.com, etc.) and now evolving to more applications.

        Robert Spivack
        Voicegateway.com Web Services
        spiv
  • I would subscribe....

    When I noticed that Outlook was available on a subscription basis, I thought, ?wow, you know, I would probably pay $50 a year or so to subscribe to Office. Microsoft got me again!? It sure sounds better than paying a much larger sum up front. Buy now, pay later kind of feeling. I was looking at how I could upgrade my other office applications via subscription but found out you couldn?t.

    Since a lot of people are seriously looking at alternatives in the open source scene, one would think that Microsoft would be nuts to not at least try some type of subscription service on a wider basis. Just look at the new pricing for the next version of Office.

    What was that called again? OpenOffice.org?
    Dawnsman
  • subscript office

    Here in New Zealand the idea met with almost zero appreciation. Not one manager, consultant or company owner wanted to be at Microsoft (or any other vendors) mercy. The business models here don't have the flab that the US and Continent have so a shift in Office policy or price would be instantly felt in most businesses - and the chance of Forced Upgrades (eg having to upgrade a routine, established, core business system running well on an old and fully depreciated set of hard/soft/ware) was a cost and risk of failure than was not acceptable. In some cases having a bad budget month affecting your core office systems (especially if Microsoft decides the dollar is costing it income and thus bumps the price at the same time!). Hell if your central software went out that that you might as well close the doors and go home - after you've paid out of pocket all those leaving paychecks...
    mist42nz
  • RE: Whatever happened to Office subscriptions?


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