Saturday, July 5th 2008

Microsoft to Offer Software on a Subscription Basis

Soon, among your usual utility bills of electricity, water, gas, telecom, could be a new addition, software. Microsoft has come up with a new subscription model, where instead of outright buying a license to use the software, consumers can subscribe to use it. A monthly or annual subscription charge has to be paid by the user (subscriber) to continue using the product.

This scheme for now covers products such as Microsoft Office and One Care security software. Analysts are already beginning to predict this will be Microsoft's next big business model which will fuel its growth in the years to come. There's much in store for both consumers and the company.

For the consumer it means value. Let's say I subscribe to Microsoft Office 2007 for this year at a charge of US $70, the next year, if Microsoft comes up with a new version of the software, say Office 2009, I can simply unsubscribe to this and switch over to that, a lot more convenient than if I were to buy a $350 copy of an Office 2007 variant at the store, and next year Microsoft comes up with the new version, I end up spending a lot more to be able to use that software.

For the company it means higher income, since each legitimate subscriber will have his own usage account and illegal copies of the software won't run since the user still needs a subscription account with Microsoft to even run the software or end up using the pirated product disc as paper-weight. While it's only limited to Office and One Care now, it wouldn't be too far-sighted to think other Microsoft products, even Windows for that matter, could come with subscription plans.With inputs from Newser
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27 Comments on Microsoft to Offer Software on a Subscription Basis

#1
CStylen
[quote="btarunr, post: 870632"]For the consumer it means value. Let's say I subscribe to Microsoft Office 2007 for this year at a charge of US $70, the next year, if Microsoft comes up with a new version of the software, say Office 2009, I can simply unsubscribe to this and switch over to that, a lot more convenient than if I were to buy a $350 copy of an Office 2007 variant at the store, and next year Microsoft comes up with the new version, I end up spending a lot more to be able to use that software. QUOTE]

Most users in the business world do not upgrade software frequently enough for this to be cost effective. Mainly due to the time spent on training. Just think of how much XP would have cost us by now...

This is exactly how my appraisal software works...$450/year at least just to keep using the program. I would much rather pay the one time fee and be done with it.
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#2
Mussels
Moderprator
typo in the title. should be subscription.

This would reduce piracy a lot, lessening the initial cost. I'd pay $10 a month (at most) for a windows licence that i could transfer when a new OS came out.
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#3
Luke
well i won't pay subscriptions
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#4
ManofGod
Yeah, I am not necessarily fond of the subscription idea either. Oops, you did not pay your payment, guess we will turn off you windows until you do. Oops, maybe we will have to turn off you office until you pay. So what if you cannot access your files, I guess you should have paid.

Joe
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#5
Mussels
Moderprator
by: Luke
well i won't pay subscriptions
you wont pay for an OS either, lol.


manofgod: thats a very valid point, i hadnt considered that.
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#6
btarunr
Editor & Senior Moderator
by: ManofGod
Yeah, I am not necessarily fond of the subscription idea either. Oops, you did not pay your payment, guess we will turn off you windows until you do. Oops, maybe we will have to turn off you office until you pay. So what if you cannot access your files, I guess you should have paid.

Joe
It's like an internet connection you have. If the due date is 30th of this month, you don't pay, it's the same "oops, no pay, no connection", right?

oops, I know you want to chack email, oops, I know you want to pwn someone at WoW, oops, I know you want to show-off your e-pns at the forums, oops, I kno......but no pay, no connection.

^substitute 'connection' with < insert utility here >
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#7
kaneda
and this shall only make more people go and look for alternatives, linux shall rise above all.

although unless apple also switches to this method i dont see how thats going to be good for competition.
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#8
btarunr
Editor & Senior Moderator
by: kaneda
and this shall only make more people go and look for alternatives, linux shall rise above all.

although unless apple also switches to this method i dont see how thats going to be good for competition.
How? It's cheaper than buying the software, right?
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#9
kaneda
not really, microsoft is a business first and foremost, its aim to to make money.

subscriptions dont end unless you stop using the software. paying 10bucks a month for the next few years as i use this OS doesnt exactly make me feel all that better off.

if its as tpu says and its for things like office, i can understand sorta. still it wont effect me.
or about 80% of this forum's users.

im really unfit to comment as i , speaking honestly, NEVER pay for anything other than my online smack addiction.
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#10
t_ski
Former Staff
Microsoft has been doing this for a long time with businesses and school. The college I was going to had a deal with Microsoft where the school paid "X" amount of dollars for for software, and Microsoft provides them with the latest version of whatever the school wants.

Also, Microsoft has been working to make many applications web-based for this same reason: you won't even have to have the software installed locally. Just browse to the web-location you need and the software is there for you.

There are two reasons for this. First, Microsoft got hurt by having six-seven years between XP and Vista. They spent a lot of money to get one OS rolling, and the initial release is where they see the highest volume of sales. (Just think of all those people standing in line to buy Windows 95 when it came out.) Whenever there is a big gap in time between the OS release dates, they don't have a lot of income coming in. Going to subscriptions makes sure that there is a regular paycheck coming in from everybody every month.

Second, going to a web-based set of applications allows the users to pay and access the software, without having to buy the disc. The disc, the manuals, the boxes, etc. all cost money. Less stuff for MS to produce means more money in their pocket.
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#11
mullered07
bear in mind most people buy preconfigured systems with windows on them, this wont work, oh heres your brand new $1000 pc now you have to pay m$ $10 a month to use it, i dont think so.
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#12
cloaker
What about the people who dont build computers and just keep a Dell for like 6-7 years before they upgrade again. People like them will be 100% screwed with this, especially since all the companies like HP and Dell use the newest version of Windows when building the comp, which would be the most expensive.
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#13
FatForester
I can (somewhat) see the practicality with Office, but buying a new version of office isn't going to help you write papers better, make better presentations, or make better calculations in Excel. Maybe I'm just crazy, but I'm not the type of person to go buy out the next version when the current is working just fine. I'll probably be using Office 2003 for years to come...

Anyways, I've always been afraid of them doing this. The only way they could really pull this off with Windows would be if they got Apple to do the same thing with OSX. If people are having to pay monthly / yearly for Windows, but OSX is a one-time deal (although releases are much more common), what do you think people are going to do? It's either become a pirate, or switch.
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#14
Kreij
Senior Monkey Moderator
I think that it is fine, as long as they continue to give consumers the option to buy a license outright in the event they do not plan on upgrading on a regular basis.

Web based applications are all well and good, unless you're out in the sticks and stuck with dial-up.
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#15
Mussels
Moderprator
well it wouldnt work monthly for the reasons people have said, but yearly ($200? $250?) (au) a year, for one OS, one office, and the web things, would probably sell well considering say, vista ultimate gives costs around $700au in retail stores.
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#16
btarunr
Editor & Senior Moderator
by: kaneda
not really, microsoft is a business first and foremost, its aim to to make money.
To make money is the foremost aim of any business, charity included.....or should I say, Mozilla included.
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#17
Kreij
Senior Monkey Moderator
by: btarunr
To make money is the foremost aim of any most business, charity included.....or should I say, Mozilla included.
My wife runs a Massage Therapy business.
She wants to help people and wants to make enough to pay her bills, but we actualy do better on taxes if her business take a loss. :D
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#18
CrAsHnBuRnXp
It has its pros and cons and I must say that if I have to pay say $50 a year to use office or even Windows, I will. Because by the time they come out with a new OS or Office, your paying close to the same price anyway. This IS assuming the subscription fee is low enough.

If they do do this, it will probably be like what they do with Xbox Live. Pay monthly, every 3, 6, or a year. When you look at the figures, if you dont just flat out spend $50 for a year (and most times get a free month) your spending a lot more in the long run.
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#19
AphexDreamer
This gives them so much more control. What ever happened to thinking about the customer and not how much money you are going to make/gain. Come on, don't be an ass Microsoft.
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#20
eidairaman1
by: AphexDreamer
This gives them so much more control. What ever happened to thinking about the customer and not how much money you are going to make/gain. Come on, don't be an ass Microsoft.
makes no sense as we are already subscribing to MS software by buying licenses.
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#21
GSG-9
That would make me a linux os fan.
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#22
CrAsHnBuRnXp
I personally say piss on linux just because i dont have the time to learn its bs on how to install something. Granted im 21 years old i dont have the patience to learn it. I wont go with mac either because its too expensive, lacks video games (though not like it used to) and it really isnt all that upgradable.
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#23
Shyska
This model has been for a while for a businesses. Also there is SA (software assurance) that gives licenses upgrade rights.
Unless they make these payments a lot smaller than they are now, I don't see many customers...
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#24
Wile E
Power User
by: eidairaman1
makes no sense as we are already subscribing to MS software by buying licenses.
Yeah, but when you outright buy the license, you have a lot more flexability on how you use your software.

I, for one, will not ever pay for software on a subscription basis, especially if they do this with Windows itself (Office is a little more understandable, but still no). If that happens, I'll just pirate it.
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#25
eidairaman1
by: Wile E
Yeah, but when you outright buy the license, you have a lot more flexability on how you use your software.

I, for one, will not ever pay for software on a subscription basis, especially if they do this with Windows itself (Office is a little more understandable, but still no). If that happens, I'll just pirate it.
well you certainly cant copy it for backup purposes as that violates their new rules.
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