Microsoft bags Office XP subscriptions

Strapped for cash?

Microsoft has finally climbed off the fence it was straddling with regard to Office XP subscriptions, firmly on the side of not doing any such thing in the USA (and not a moment too soon, with the product launch a scant three weeks away).

The company had a very good reason to pursue a subscription model with Office, namely to get advance reviews with which it might gauge the smashing success it anticipates with its grand .NET vision.

So it must have an even better reason for dropping the scheme.

Redmond's official explanation -- that it prefers a more 'metered' approach to the subscription rollout -- is obvious nonsense; but it's nonsense which doesn't even hint at the truth, so we'll just have to guess at what's really going on.

We're confident that this is what Microsoft would want us to do; otherwise they'd have said something meaningful when they had the chance.

Our first guess is the most elementary: that beta-testers didn't trust the renewal scheme out of fear they'd get stuck buying a full version at some point in future, such as the day when MS decides that software subscriptions are an incredibly dumb, Bob-ish idea.

Guess number two is that the company needs cash to shore up its revenues for the next few quarters; and of course upgrading will bring in far more of it far sooner than long-term subscriptions. Office is a proven cash cow; and if MS is looking to lean on it a bit now, it's probably be because it's lost confidence that Windows XP and the X-Box can generate revenues sufficient to keep Wall Street off its back in the coming months.

For a third possibility, one could imagine that MS doesn't have a decent renewal mechanism in place and has decided not to solicit obligations it's unsure how to satisfy. In that case, look for long delays in getting the grand .NET scheme off the ground.

Office subscriptions should have been a fine opportunity for MS to do some live market research, and a nifty way to wean users off the idea of 'buying' software in anticipation of the .NET Revolution. It should have been a winner for Redmond, even if it failed commercially. At least it would offer insight into the tricky world application services the company claims it's going to conquer next year.

Something clearly isn't right. We wish we could be more specific, but time will tell -- as it always does. ®

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