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

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.

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TOPICS: Microsoft
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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.

Topic: Microsoft

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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65 comments
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  • Blech...

    There's no way this Office rental scheme would be a real success if this is going to be foisted on real home users, unless if it's done more like a leasing program. Make enough payments, and the Office/Operating System is yours to keep. Otherwise those users would rather just use a free alternative(OpenOffice.org/Linux) and save a lot of money.
    Tony Agudo
  • $15 a month is WAY too expensive...

    That's most of a phone line. Half of a broadband connection. A Co-Pay on a prescription.

    Office is, well, office. I'm not paying anyone $15 a month to write letters or check email.
    BitTwiddler
    • agreed ... WAY too expensive

      Consider, if you will, that I am not unique in keeping the same version of office for at least four years. Consider a retail price (which is way more than I paid) of approximately $450 (USD), that would work out to be $9.38 per month. Given the facts that there are many pricing options available (reduced functionality, OEM, etc.) and we aren't even considering time-devaluation of money, $15 would just be another means of price gouging the consumer.

      NOTE: $450 is a conservative estimate of Office 2007 Professional found at www.amazon.com.
      David A. Pimentel
      • Oh come on, Setting Standards

        Lets get grounded in the now.

        Lets recognize that Microsoft has in the past tried to set standards rather than follow what IT professionals have agreed to used. Lets suppose that right now Neukom and his American Bar Association are lobbying US courts to change rules regarding evidence submission. Lets assume that because Neukom is part of the Gates crime family that the lobbying emphasizes new Microsoft document formats. If successful all the Open Office and Word Perfect users will have need for renting a Microsoft tool from time to time in order to submite evidence to a court of law.

        Lets suppose the effort fails because when it comes to decisions regarding information technology the American Bar Association is out of line to pretend it has competency. Lets suppose that IT professionals start working the US courts so that evidence is submitted in Open Document Format and PDF.

        Rise American Programmers
        friends of the courts
        mighetto
    • AGREE

      i totally and utterly agree!!

      if they are talking about 2 dollars per month that is more the amount they should be charging, esp when open office is free!
      usrhlp
  • Sounds like one more way

    a corporation is trying to leech $$$ out of consumers pockets. As if we don't rent enough and pay enough fees and fines!? ]:)

    What a stupid idea!
    Linux User 147560
  • Mike Cox had better break out that...

    bottle of ether to use on the CFO. Hmmm....a hundred people in the accounting department X $15 a month is $6,000 a year. Then you add in the CEO who has several copies for his staff (what, you expect him to read/write his own mail?)...the rest of the administrative folks...Criminey, that adds up fast! Wonder how long it would take to run GM out of business doing this?
    Cardinal_Bill
    • In some enviroments

      That could be cheaper than buying, in the same way it can be cheaper to lease computers, not to mention possible tax advantages

      Short term hire. trial access of software. Yes its more expensive than pirating software which is what i suspect a lot of people on these groups do
      mrjonno
      • you really do?

        I think most people have original copies of the Office.
        So do not assume most people are crooks.

        I suggest to run old 95/97 Offices if you can... the new stuff is simply not worth
        the dollars just to write letters...

        I did not get any better benefits out of MSWord for Office 2000, 2004 - just a
        waste of money.

        I guess to move to OpenOffice would be a better solution. Corporation should
        support it, so we no longer have to deal with such crappy issues.
        Gene(ius):)
        • What a limited persepective...

          <sigh>

          [b]I suggest to run old 95/97 Offices if you can... the new stuff is simply not worth the dollars just to write letters...

          I did not get any better benefits out of MSWord for Office 2000, 2004 - just a waste of money.[/b]

          Just because YOU, personally didn't see any benefit from an upgrade from Office 95 to 2003 (NOT 2004), doesn't mean the rest of the universe didn't get anything out of it.

          Word is more than just a tool to write letters. Word has a rather nicely developed macro facility that allows all manner of office automation that neither OpenOffice nor WordPerfect can match. While it IS true that the very same macro facility can be abused when some scum sucking lowlifes use it to create viruses, the automation facility can be VERY useful.

          The problem with Office 97 and earlier versions no longer work as the macro language DID change. Links with various apps require newer versions of Office.

          Word also has a unique ability to be manipulated by other applications - such as FaxRush - a fax server application that uses Word to manipulate templates to create cover pages and other documents. The current versions of that product do NOT support anything before Office 2000.

          Just because YOU didn't get anything out of it, doesn't mean it's worthless or a waste of money.

          [b]I guess to move to OpenOffice would be a better solution. Corporation should support it, so we no longer have to deal with such crappy issues. [/b]

          OpenOffice might be fine for SOME users, but it's NOT a universal panacea. Some Word documents do NOT get opened correctly. Complex tables get reformatted into a bloody mess and do not look ANYWHERE close to the way they were designed to look in Word. So it's fine if you're just banging out simple letters and the like but when you get into anything more complex - fuggetaboutit...
          Wolfie2K3
          • Uh uh...

            Actually, while the macro facility in OOo differs from that in Word (apparently the only "valid" facility, by your lights) it's equally powerful.

            Word also mangles WP documents, and even docs from other versions of Word.

            OOo is still evolving, but if one standardizes on it they will do well - and in perpetuity.

            If doc exchange must occur between users of OOo and Gates Groupies, OOo exports rather nice Word files.

            Don't bitch about how other programmes fail to interoperate with Office; it was designed not to play nicely with others.

            Bix
            bixbyru
      • " i suspect a lot of people on these groups do"

        A thief always suspects everyone else is a
        thief.
        That would suggest that you are a .....what?

        Sorry to rag you, but you shouldn't accuse
        anyone of being a thief unless you have some
        evidence that they are. If you do, then
        present the evidence, don't just hurl empty
        accusations. (my 2 cents)

        p://www.channelinsider.com/article/Compatibility+Concerns+Hinder+Vista+Upgrades+IT+Pros+Say/199391_1.aspx?kc=CITCIEMNL012507STR1
        Ole Man
  • Pay-as-you-go depnds how how you measure going!

    A pay as you go model might make sense for some, but not a per-month rate. Again, think of it like a cell phone. If I use Office for a few hours a week, should I pay the same rate as someone who has office going full tilt all day long, eight hours a day? If, on the other hand, my "card" has "Office application minutes," and I deplete the card as I use each office application, it might make sense. If I have Word, Excel, and Outlook all running, I'd be burning minutes faster than if I just check my email a few times a day.

    This might even make economic sense for Microsoft. There are probably an enormous number of folks out there who might use Office now and then, but don't think it worth the up-front costs right now. Being able to buy Office Time as needed would make perfect sense. At some point in the process, the number of minutes used would add up to being cheaper than just buying the product. (You might even have a "rent to own" option!)

    The all-or-nothing model of software marketing probably puts off as many folks as it ropes in. Thinking more broadly makes sense.
    danson9
    • A per-minute model only works ...

      ... if MS can monitor it constantly. That's possible via an on-line delivery model but not much good if you have the code installed on your machine.
      M Wagner
    • You are a clever individual.

      'Nuff said.
      bixbyru
  • Let's see ...

    ... $15 per month over four years (Office 2003 to Office 2007) comes to $720 for the lifetime of Office 2003. That's about twice retail, isn't it? Why would anybody do that except on a trial basis to determine if they wanted to move to Offce from a competitor's product? After all, onces you're in, you're in! There's really no going back so you might as well BUY instead of leasing.
    M Wagner
    • Hmmm.. But there's a problem with that business model...

      [b]... $15 per month over four years (Office 2003 to Office 2007) comes to $720 for the lifetime of Office 2003. That's about twice retail, isn't it? Why would anybody do that except on a trial basis to determine if they wanted to move to Offce from a competitor's product? After all, onces you're in, you're in! There's really no going back so you might as well BUY instead of leasing. [/b]

      While I agree with you as far as the price for this rental is astronomically high, why would anyone want to spend 15 bucks a month to test Office when Microsoft is already providing the 60 day trial of Office 2003 and 2007 for FREE?

      I think the "FREE" carrot is more appetizing than the same carrot for $30.00 - especially if the goal is to get you to buy the full product.
      Wolfie2K3
  • Rent software? Gotta be...

    ...#$*%ing kidding! I'd sooner eat a battery.

    For the Nth time, MS has gone "too far," but that'll likely not get regular Joes riled. So, siree.

    They'll just pay their MS tax, "upgrade" regularly and chew their cud.

    One might just keep the system they have, or switch to Mac, Linux, BSD et cetera. One might take the reins of their own life.

    M'self, I dumped MS '91 - well before 'twas fashionable to do so. Since '93 I've used and developed for Linux, and have no regrets.

    Y'know, a lot of the "Is Linux erady for users?" malarkey centres about the differences between Windows and any Linux distribution.

    Yeah, it's a little less dummy-friendly, but the parts most people use work just as well as MS' offerings. Further, it actually evolves and is regularly improved as differentiated from Windows with its occasional spit and polish changes - which are mostly spit.

    If people were more like the "greatest generation," which in personal computer terms was the '70's - a time when people (and not just engineers) bought the things and taught themselves to use 'em - then this would be a non-issue.

    These days, plonkers expect to bring the packing case home and set it on the floor, at which point their computer'll unpack itself, waddle over to an outlet and plug itself in, then jack into the 'phone line and dial up AOL.

    If these bloody, ignorant apes would face a five degree learning incline, then they'd own their own data, programmes and futures.

    I guess people get basically the computing environment and expenses they deserve, and if they're willing to give up essential freedoms and security in exchange for a little temporary convenience, then they deserve neither freedom, security nor convenience.

    The computing world was a far better place before the bar was lowered to the point of being inlay.

    Bix, geek of the plains

    Power without wisdom is akin to an adze with a ruined edge, sited more to the vandal than the builder.
    bixbyru
    • They've only gone TOO FAR if ...

      ... their 'bread and butter' customers rebel. So far, that's not happened. MS has tried it's share of 'trial baloons' in the past and often backs off then their loyal following says NO! Most people can download OpenOffice for free and have everythign they actually USE in MS Office BUT THE DON'T so to say that MS has gone too far is simply not correct.
      M Wagner
      • Hence...

        ...my commant "for the Nth time." In other words, "too far" is my take, but if it doesn't scuttel MS then it's not too far.

        Humour, y'know...

        Bix
        bixbyru