Original URL: http://www.theregister.co.uk/2008/07/03/microsoft_subscription_services/

Microsoft flogs subscriptions to the unwary and confused

Bad omens

By Gavin Clarke

Posted in Applications, 3rd July 2008 18:58 GMT

Comment There's no such thing as a coincidence or a missed opportunity in the world of Microsoft, and this is no ordinary week.

Just days before thousands of partners from across the globe descend on Microsoft's annual World Wide Partner Conference in the heat of Texas, Microsoft announced licensing programs clearly intended to whet their palates.

The guttural sounding Equipt wraps a version of Office in with Microsoft's security update service and online storage - Windows Live OneCare and Office Live Workspaces, respectively. For big businesses, Microsoft also announced that Select Plus Volume Licensing is due later this year.

Microsoft will likely promote both as services that partners can sell, as they mean subscriptions that provide predictable and guaranteed revenue. There are fundamental issues though that mean that next week you should put your fingers in your ears and sing "la, la-la la, la" when Microsoft starts talking.

Let's take Equipt first. Misery, it's said, loves company. Microsoft has picked Circuit City to pimp the service. The US retailer is struggling to find a buyer for its business, after Blockbuster backed out of a proposed deal and remains in the wake of rival CompUSA's closure. The fact that Circuit City is the first to sign up is a bad omen in a branch of the IT ecosystem that Microsoft has had nailed for years: the high street channel.

Microsoft's services are also not just confusing, they are in a state of confusion and always changing. Do you want to get caught in the middle of that?

Office Live is targeted at small businesses. Or so we're told. Yet why is Microsoft making it available under Equipt with the Home and Student 2007 edition of Office?

Business users interested in Office will opt for the full suite. Also, being naturally fiscally shrewd types, they will pay for the lifetime license, not for subscriptions that end up costing more in the long run.

Microsoft is clearly trying to offer some kind of desktop and cloud-based service here, akin to Apple's combo of the Mac/iPhone and MobileMe. But take a look at Office Live and the Home and Student versions of Office and you'll quickly see that these are weak imitations from a finished look and features perspective.

The Vista catch

Finally, just how simple can you make something before people actually bite? Windows Live OneCare was launched by Microsoft with the promise that it would improve computer security because it automatically took care of the updates for them. Windows Live OneCare already comes with a subscription - $49.95 per year for three PCs.

Are people using the service? Probably not, as unfortunately for Microsoft and anyone else pimping this service, Windows Live OneCare is tied to Windows Vista.

The enterprise-focused Select Plus Volume Licensing represents firmer ground for Microsoft as it's been here before. This time around Microsoft claims it's trying to simplify. Only it's not.

OK, you get a single ID for all your organization's licensing needs and the promise of a lower software bill if you purchase in bulk. But this is not just any old bulk buying deal: each product will carry a point value, and the price level is based on product points earned for automatic tiered discount levels.

There's no word yet on how that points system will work or how customers are going to get that through their purchasing departments. Also, it's not clear whether Select Plus Volume Licensing will replace or work along side Microsoft's existing volume-licensing programs.

Select Plus Volume Licensing is another attempt to push Software Assurance (SA), which has been an uphill struggle for Microsoft since its clumsy introduction several years back. Customers who spend more by signing up to a 36-month-period of SA will get additional deployment planning services, support and training from Microsoft.

It's the same old soft offer of "planning services, support and training" Microsoft has been pushing since about a year after it launched SA to encourage uptake. The tangible discounts or guarantees that the products customers are paying to have supported will be upgraded during the lifetime of their SA contract are - once again - missing.

Mysterious moving parts

At last year's partner summit Microsoft employees were cheerleading for online services in session after session. We saw many partners walk out of these sessions in silence at the end, showing no reaction.

There's little reason why anybody should jump onboard Microsoft's software-based services because this is a moving train that's still being built. Let MS finish shifting the pieces around before you risk your business. And as for enterprise licensing subscriptions: there's little here but another layer of sediment on top of Microsoft's other programs, which have helped choke the software licensing river. ®