Software subscriptions in Microsoft's future
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This Office 10 licensing scheme is not the same as the much-discussed moveto a "services-based" Office thatwould be provided by an application service provider, though it is a stepin that direction. That version, part ofMicrosoft's .Net initiative, is some years off.
The Office subscription model immediately rang a bell with me. One of theadvances in Windows 2000 TerminalServices, about which I recently wrote a book, is the use of the MicrosoftClearinghouse, an online database forlicense distribution. I wrote at the time that this was a wave of thefuture, and that Microsoft would be using it for otherproducts before long. Now I think we're there. Microsoft tells me that themechanisms for Office subscriptions and Terminal Services won't be exactly the same,but over time they may be related.
Here's how the Clearinghouse works with Terminal Services: Each client isrequired to have a "client access license" to be aTerminal Services client. These licenses can be pre-installed on someclients, and all Windows 2000 systems come with such a license, or theclient can retrieve a license from a Licensing Server on the network.
Also, before you can use the Terminal Server you have to activate it, whichinvolves retrieving a valid activation code (not the same as a licensing code) from the Clearinghouse. You contact the Clearinghouse via phone or fax or over the Internet through a direct connection from the Terminal Services licensing program, and the Clearinghouse transmits back an activation code.
You can purchase packs of Terminal Services client access licenses from Microsoft that come with a long unique code. You enter that code in an activation dialog box. The program determines the code's validity, then it's either approved or rejected.
Presumably, when you purchase an Office 10 subscription, it will come withsuch a code. With Office, and other more consumer-oriented programs, I suspect that subscription renewals will go through the Clearinghouse or a similar facility using similarcommunication methods.
As far as Terminal Services goes, there are aspects to the process thatcould be improved, but subscription-based software is still new, and I anticipate improvements will be made.
I expect subscriptions will become the default method for OEM Office licensing as well. In other words, when you buy a new computer with Office preinstalled, you'll get a one-year program subscription rather than a conventional license. This will be extremely good news for Microsoft because the company can then look upon these users not only as sales, but as an annuity stream.
I feel positive toward the idea of software licensing subscriptions from both the vendor and userstandpoints, assuming license costs are reasonable. If they are, licensing should make it easier for users to try a program without the large investment that a full purchase entails.
With the Clearinghouse, Microsoft has the potential to make the process easy and seamless, which would make consumers less resistant to the changes. This is a point on which Microsoft must not fail: A licensing scheme that upsets consumers would be a strategic blunder the company would need a long time to overcome.
Larry Seltzer is a freelance writer and software developer and theauthor of ADMIN911:Windows 2000Terminal Services. He can be reached at
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