Feeds

MS to intro ‘annual sub’ price structure with Office 10

It's like Office.NET. Except it's not Office.NET...

  • alert
  • submit to reddit

Boost IT visibility and business value

Microsoft is to introduce its long-anticipated "annuity" model for software sales in the middle of next year, the company announced today in Las Vegas. But although renting out software as a service is a key part of the .NET strategy, the software the company will be renting first will be exactly the same as the packaged version you buy (well OK, license) outright.

Essentially, when Office 10 ships "towards the end of the first half of 2001" Microsoft will be testing out the mechanisms before it's actually shipping the product. Office.NET, which presumably will be the real thing, is a separate development track to Office 10, which to all intents and purposes will be a traditional packaged product.

The new rental model will work like this. You'll "subscribe" to Office 10 at a "lower initial cost" which Microsoft has not as yet specified. You'll get product upgrades during your subscription at "no additional expense," and you'll have to renew your subscription annually, via phone, Internet or by buying "a new subscription product" at retail.

Although the subscription Office 10 will be exactly the same as the non-subscription, i.e. not Office.NET, Microsoft says it's taking "a significant step toward our vision of an Office.NET subscription service."

Until Microsoft comes up with pricing and some clearer definitions it will be impossible to tell whether or not the 'software as a service' initiative will be a good deal. If the 'free upgrades' include whole new revs of Office, then it might turn out to be a good way of keeping pace with developments. But on the other hand, the upgrade path will likely be along the Office.NET track, and under that regime you'd surely expect whatever you were renting to be current.

Although Microsoft is pitching the new scheme as a kind of prelude to .NET, it has some similarities to an approach it has used in the enterprise market for years. There, customers are offered substantial discounts in exchange for signing up their users for a number of years, and for agreeing to take the upgrades made available during the term of the contract. This of course locks the enterprise into Microsoft software for the period of the contract, and makes it more difficult to switch away again, because of retraining costs. If Microsoft offers extra discounts on the subscription for signing up for longer periods (a la MSN), then a similar lock in factor could start to apply to the home and small business markets. ®

Related Stories

Microsoft's plan to levy annual rental fee for Windows
MS to ship new Win98 in May - annual rental here we come?
MS squeezes out free service pack distribution

Build a business case: developing custom apps

More from The Register

next story
KDE releases ice-cream coloured Plasma 5 just in time for summer
Melty but refreshing - popular rival to Mint's Cinnamon's still a work in progress
Leaked Windows Phone 8.1 Update specs tease details of Nokia's next mobes
New screen sizes, dual SIMs, voice over LTE, and more
Mozilla keeps its Beard, hopes anti-gay marriage troubles are now over
Plenty on new CEO's todo list – starting with Firefox's slipping grasp
Apple: We'll unleash OS X Yosemite beta on the MASSES on 24 July
Starting today, regular fanbois will be guinea pigs, it tells Reg
Another day, another Firefox: Version 31 is upon us ALREADY
Web devs, Mozilla really wants you to like this one
Secure microkernel that uses maths to be 'bug free' goes open source
Hacker-repelling, drone-protecting code will soon be yours to tweak as you see fit
Cloudy CoreOS Linux distro declares itself production-ready
Lightweight, container-happy Linux gets first Stable release
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.