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Microsoft hopes to lure bargain hunters with new subscription model, perhaps hints at changing business plan

There have been some in the software industry who have advocated a subscription model for their programs.  They suggest that rental programs could save both the consumer and the software companies.  Microsoft seemed to validate those advocates as it announced that it will begin distributing rental copies of its popular Office productivity suite.

The new deal will bring copies of the software to over 700 Circuit City stores across the country.  The latest version of the Office suite will be bundled with Microsoft's Live OneCare computer security software and will work for $70 per year.

Bryson Gordon, a group product manager for the Office group said that Circuit City does not have an exclusive distribution agreement; it was merely the first to jump on the opportunity.  He said other retailers and PC manufacturers such as Dell may be offering the software bundle soon as well.

The new software bundle is named Microsoft Equipt and comes with Word, Excel, PowerPoint and OneNote, plus OneCare and a handful of existing free Windows Live applications.  It was rumored for months, under the codename "Albany". 

Mr. Gordon explained that Equipt is aimed at people who when buying a new computer would skip and Office purchase and merely reuse old Office disks or pirate a friend's copy.  He said that the $70 price tag falls in the middle of McAfee Inc. and Symantec Corp's security offerings, so users can justify the purchase merely as a security suite and get the productivity software as a bonus.

Matt Rosoff, an analyst for the independent research group Directions on Microsoft remarked that while Office is the industry standard, the OneCare security suite has seen slow adoption.  However, he feels the low price and creative business model may help it catch on, probably part of Microsoft's intention with the bundle.

He argues that Microsoft's main focus, though, is increasing the number of Office users, and trying to keep them from an increasing number of free solutions, such as Google's popular Docs software.

Equipt, like Office Home and Student 2007, allows installation on up to 3 machines.  Minor updates are automatically provided, through Window's update software.

The software will be available mid-July.

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By carlleigh on 7/5/2008 12:23:35 PM , Rating: 0
I'm amazed at how very poor education has become in the world today. You are supposed to feel good when companies gets bigger, with new skills and generally becomes better at what they are doing. Usually at some point to maintain their lead they offer cheaper prices. Which again should make us all feel good. My PC Computer for example 20 years ago would have cost a cool Millon dollars U.S.

As time goes by if they have a good product other companies will come up with competing products, maybe good, maybe as good or better and they will try to under cut the market leaders. Because of increasing scales of economy the market leader matches or beats their price and still makes their margins. They'd like to maintain sales and they can always make up any loses by finding new customers or becoming more efficient.

Microsoft must be finding new customers, for example, third world countries. They must be better than 10 years ago. My guess is that what ever their selling it for their profit ratio's have only gone up.

Hmmm! I think they are ripping you off. The Microsoft deal - Lets sell them something that is increasingly less desirable and we will charge them more.


Do we want the Microsoft model or the Walmart model. Go Walmart. Go Open Source.......

By spluurfg on 7/6/2008 7:13:00 AM , Rating: 2
I'm not exactly sure what you're saying here... That the subscription model is more of a rip-off than the regular version?

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

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