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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.





"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes







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