It's Official: MS Office 10 Subscription Version

F.Prefect writes: "Microsoft is going to be releasing a 'subscription version' of Office 10. This version will actually stop allowing a user to create new documents after the subscription period ends. Read their press release. Although they will still offer a non-subscription version for more money, I can't help but think that Office 11 or some subsequent software package will do away with non-subscription versions entirely ..." Seeding of the .NET "cloud of services" has officially begun, it looks like. Press releases, of course, try to make you want to buy the products they're pushing, but this one is a head-scratcher. It boils down to "It works like the regular version, but you get to pay for it again this time next year, too, or it breaks!" Won't IT manager types get tired of this?

Re:Why is this bad?

The market is stagnant. What new/brilliant/whatever features has any word processor put out in the last five years? The only new things I can think of are import/export filters, and a new document format that's incompatible with the old one. Word processors are essentially a commodity product now. The only problem is, there aren't being charged like one. Microsoft isn't the only one to blame, either. All of the proprietary word processors are like that. Anyway, the upgrade cycles on these things are nuts, and totally useless anyway.

Good idea

Maybe now they'll also allow it to stop crashing after the subscription period ends.

Subscriptions

I think this won't last long. You'll see the same type of apps build on top of Mozilla for free, and people will realize what they are missing....

MS--the ASP guinea pig.

Let the experiment begin.

How Microsoft plans to "sell" this:

Bundled.

The plan is not getting users to buy subscriptions. They'll sell this to computer makers, to be bundled with desktops and notebooks. This way, they force the users to either renew or buy Office after one year.

And this won't be a problem for the computer makers, because they won't _have_ any option. First, it will be cheaper, naturally. Second, Microsoft will railroad any opposing makers into accepting it. For instance, by simply not offering the unlimited version at lower prices.

It's brilliant.

/me pats pats his FreeBSD

Re:Why is this bad?

Au contrere, mon ami. We like free speech and free beer; and dislike licensing models which we find laughable.

I guess - if you pushed them - the posters in this thread would state their belief that they think MS has a big problem: why should users continue to pay to upgrade MS applications, when there is as near as damnit no difference between one Word version and the next. We guess that MS thinks, "a ha! if we can get the user to hire the application rather than buy it, we have revenue for life".

Even the press release - bless it - gives the game away. They speak of "at a lower initial cost" which begs the thought that the lifetime cost will be greater.

And the conspiracy theory? I think it is reasonable to speculate that MS would like to be a service company rather than a product company - especially in a marketplace in which the commoditisation of products is driving price.

We don't think MS is stupid. We know they are very clever indeed - especially at the business of business models. And the subscription business model is clearly more attractive than the "I'm happy with my Office 2000 and don't feel inclined ever again up pay to upgrade".

X-Box ... MSN ... it's a killer app!

They'll make a killing on this if they offer this to home/non-commercial users as part of a subscription to MSN. For example, an extra $5/mo might get you the entire office suite. This might not seem like a lot, BUT:

o A reasonable price would deter people from pirating the software
o It's an immense value-add for MSN
o It's the perfect entry for a "desktop anywhere" feature, which would put your documents at your service via ANYPLACE you login.

Here's the best part: make this available for X-Box users. Suddenly, the kid's toy becomes a VERY inexpensive replacement for the computer. AND Microsoft will get a handy stream of revenue. If they sell 10 million X-boxes in a couple of years... and even 5% of those end up with a subscription to MSN and Office at $25/mo, we're talking about $150million/year. US alone. AND they'll dominate the browser, 'cause it's their platform.

There's more: How fast can HP or Epson write a app for the X-Box to use their digital cameras with it? Scanners? Will it have a firewire port? How about hooking up the camcorder? DVD player, right? I've heard it's going to support HDTV resolutions - so if it's done right, it'll be on every videophile's list too, especially if someone writes their own HD-DVD format - just upgrade the software DVD player!

The possibilities really are endless with this one... by Microsoft creating the hardware, and the OS, they're doing what IBM wish they had done back in 1980-81 with the IBM-PC. By providing the subscription to the software, they're giving themselves a constant revenue stream for years to come.

It gets more and more interesting EVERY DAY.

Boy, what a choice.

> Open source advocates are always talking about the virtue of choice, but when MS offers choice, they cry foul. How convenient.

So, either you can pay MS once, or you can pay them every year. Gosh golly Captain Wizzbang, what will they think of next??? Maybe they'll add a paperclip on crack as their next feature . . .

Being told ``you can pay us so much now, or you can pay us the same amount each year" is not a choice. Unless you are braindead & need more than 5 seconds to decide between the two options.

> And don't come out with the crazy conspiracy theory that "Office 11 will be subscription only". First of all, it attributes to MS a
> level of stupidity they simply lack. And there is simply not basis for that statement.

Interesting. Leaked memos have been available for a couple of years showing that Billg & Ballmer have seriously entertained this concept. After all, their End User Agreements state that you have NOT bought the software, just leased the right to use the binary. And if UCITA passes in your jurisdiction, be sure that they will change the terms of the contract.

And have you ignored the fact that MS requires companies with site licenses to pay for their software *twice*? Once for the concenience of having it pre-installed, & once for blowing it away so that the tested, & corporate-approved version can be installed. A quick search on Gogle turned up this URL: http://www.canada.cnet.com/news/0-1003-200-2427307 .html

As for the charge of ``stupidity", I think the better word describe any company that stands squarely behind UCITA is ``venial".

MS is seeing the numbers of sales begin to slide; migration from NT to Win 2000 is far less than what Gartner & others predicted. So MS has to get the revenue from somewhere. Which means this braindead licensing choice. And if they DON'T force theri customer base to migrate to a subscription basis, then they ARE stupid.

Geoff

Services vs. Products

A lot of business have begun leaning in the direction of "application service providers" (ASPs) instead of product makers. In many ways it is very tempting for a business to do this. For one, you retain more control over your product (partly through stronger contracts), for another you create a source of continued income instead of a single payment. This can allow for a higher profit margin (since income is periodical and not tied to product releases / new-product development you can keep charging for a product even after you've stopped development (and thus have less development costs)).

Microsoft has been doing a pretty good job of tweaking their products just enough to get people (and businesses) flocking to upgrade even with very little new development. Windows 98 SE and Me upgrades from Win98 cost the same as the Win98 upgrade from Win95, but there is much less development in them. Same price, less work, higher profits. Nothing new. Although in many cases the "less work" usually comes with higher productivity (so the end product is the same quality), but it doesn't seem like this will be the case.

Anywho, the advantage of services instead of products for the consumer is that (theoretically) setup, installation, upgrades, support, etc. are easier. However, (as mentioned above) services come at a significant loss of "rights" for the consumer. Ownership is very powerful, and in many ways very desireable. When you rent something you loose control over it and it's no longer yours entirely. In the next few years there will be a major "shakedown" of what people choose to be services and what people choose to own.

Personally, I think the service model (for some uses) is very valid, but I also worry about the transfer of rights and powers from the public to the big corporations. I think that ultimately most people won't want to give up their ownership of basic software, and (perhaps more importantly) there will be a large base of free or purchasable software out there keeping the big guys' services in check to keep things from getting out of hand. I suppose we will just have to wait and see, but it's bound to be interesting no matter how it plays out, let's just hope it's not too interesting.

Re:Why is this bad?

Why is this bad?

All righty then, Mr. Smarty Pants, why is it good? What extra service does the "rent" (vs. own) get you? What is it that would make me "buy" this rather than a version that doesn't auto-destruct? MS claims this is "an exciting new opportunity" -- for who? Their bankers?

There's exactly one reason this will be accespted in the market, if it is at all:

This new model will enable home and small-business customers to acquire the latest version of Office at a lower initial cost while receiving product upgrades released during their subscription at no additional expense.

So, I get it cheaper, but I gotta pay next year. I suppose this is actually Microsoft trying to compete with the Warez market. They ship "works" with a lot of prefab PCs these days. So what happens then? I'll wager that, a lot of the time, people bring home Office CDs from work and/or get them from friends. For free. With no subscription fee. So, if they can go legal and get upgrades automatically for less than paying retail for the thing, then they might. Plus, I can see the MS playing out this way: "Computers are hard to keep working right! Upgrades, patches, work, work, work! Pay us and they'll always work right. Friendly MS agents will visit your computer through your spiffy DSL line and make sure you always have the latest, greatest, bug-free stuff." They'll turn "Windows Update" into a revenue stream.

I wonder what the per-seat issues will be for business and/or homes? Renewal is annual, not one number-of-documents, as far as I can tell. So, if I install in on my wife's laptop and my desktop, so I subscribe twice? I don't subscribe twice to cable, or the newspaper.

Open source advocates are always talking about the virtue of choice, but when MS offers choice, they cry foul.

Oh, puhlease. MS is offering the same software in either case, merely with two different payment options. One, the traditional "costs too much" payment option, and two, the "ransom" option. The whole idea of software as a service is sort of ludicrous.

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Re:Subscriptions

LOL! A browser-based word processor written in XML. Bloat-O-vision! I imagine Intel came up with that scheme to sell more processors. Want MozillaWord to run as fast as Word 5.1 ran on a Macintosh Centris? Get the new Pentium 7, now available at 18GHz with 40MB L1 cache!


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Banking on user laziness?

Think through the psychology of this for a while.

• When are Microsoft going to ship Office 11?
• What's the cost of a years subscription, relative to a full license?
• Where's the break even point?
• If I choose to subscribe to Office 10, do I auto-subscribe to Office 11?
• Can I subscribe individual components (say Word and Excel, but not PowerPoint?

Microsoft seem to be hoping that people won't work out how long they'll resubscribe for, and may make additional funding on the difference. You know many people aren't going to do the long term thinking here - they'll just see a lower initial price.

See Rob's comments in Geeks in Space as regards rental of his TiVo - he's coming up against a break-even point of rental vs purchase - he'd hoped that a better version would be available so he could change for less money....

Re:What I would like to see

Ah, but you see, the PC2001 specification will include a credit-card reader! The box will actually say "INSERT COIN TO CONTINUE" and will have a progress meter* counting down the seconds. You see, Bill actually wants to return us all to they heyday of computing he grew up in. That's right. The video arcade. .NET is actually "MS Return of Arcade," without pacman.

*counts backwards in years

________________________________________

And the answer is ....

"Microsoft is going to be releasing a 'subscription version' of Office 10. This version will actually stop allowing a user to create new documents after the subscription period ends.

So day 1 you make an empty document of each type and archive it ..... from then on you just duplicate empty documents on the desktop rather than using office to make them for you .... or better yet - download those warez empty documents from the net ..... can you just see M$ going to court trying to ban the giving away of empty documents .... :-) "but your Honor - they're a device designed to 'subvert an access mechanism'" - "in rebutal - 'we made them with Windows - it's time it was banned'"

Don't be so sure it'll last...

Microsoft operates as a series of individual business units. While that gives them the maximum flexibility to try new things, it also means they often have to learn the same lesson more than once.

Take subscriptions for instance. MS Visual C/C++ wanted to go that model, as many programmers here may recall. "Buy 4.0 and subscribe to MSDN, you'll get 4.1, 4.2, 4.3, every three months like clockwork." Well, the versions came out... 4.0, 4.1, slip, 4.2, slip, slip, slip, uh, 6.0!

By going to a subscription model, they give the user false impression that the product will continue to advance on a rigid schedule. There's no way to win:

if it doesn't come out on time, the customer will feel seriously jypped at the renewal dues;

if it DOES come out on time, the customer has to churn all those desktops' installations to keep step with the advances, or relegate the expensive updates to dusty shelfware.

If they use some sort of lockout like cheap nag shareware, a la "It's February, you can't use the Save feature until you renew your Office subscription dues..." some people will definitely find alternatives. They'll have to keep increasing the dues as the flock of docile sheep dwindles.

Universities

Universities are going to be hit the hardest with this kind of change. Not only do they have to constantly keep track of what licenses expire when for hundreds of computers, both PC and Mac (yeah KeyServers!), they have to support and maintain software on student, lab, and faculty computers. OK. Renewing MS Word on all the lab computers is a time consuming process but relatively straight forward. But renewing MS Word on several hundred faculty computers that are have been taken home, away at sabbatical, or are tucked away in individual offices all over campus is going to be HELL! And you just know that none of the faculty are going to understand why a support personel has to come in every now and then and renew software on THEIR machine that they thought was permanent, just like software has been for the past 20 years! And not only this, but all the ITS people will have to explain the subscription service to their students which means documentation, support, etc.

ARGH!

You call this a choice?

This is no different from the existing terms. In fact, it's worse. Now M$ can force you to pay an arbitrary fee, and the program (and thus access to your data) won't work if you don't continue to pay. In other words, they blackmail you with your own data, and worst of all this is actually legal.

This, more than anything, only proves that Microsoft must be stopped. They're advocating the very monstrosity they basically created: a model where you don't even own the software you buy. In the end, this is going to result in one of two things. In the most optimistic outcome, people finally realize what Microsoft is doing, and they abandon it. More likely, however, is that more corporations -and not just in the software industry- will adopt this model, and in the end we all become little more than a sort of slave class, except that instead of being forced to give them endless labor, we're forced to give them endless cash for something we've already bought and paid for.
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Re:What I would like to see

"This copy of MS Office failed to autodestruct. Check your Dial-Up Networking propertises and try again later."

Could be bad, could be good...

Like so many things M$, the PR sounds good. In exchange for a fee, I get an easily updated, constantly state of the art office software product. As it is a 'lease' or 'rental' as opposed to a purchase, it is now a cost of doing business as opposed to a capital improvement (or that is my understanding of the appropriate tax law). In addition, if forthcoming improvements don't exist, I end the revenue stream from my company to them.

Problems:

It will probably be a dumbed down version, no matter what. Expect even worse 'support' for other file formats. Probably some lame requirement that my subscription can't transfer to a new machine without some additional fee. I expect it to be as easy to cancel your subscription as an AOL subscription (now we know what those two are REALLY cooking up;).

What would be most useful for my company:

Have M$ Word substantially cheaper than Office. A whole lot cheaper. We don't use PowerPoint or Excel. It would be nice to not have to pay 50% for 20% of the functionality.

Let us buy based not on time, but on the number of documents created. We don't even do much stuff in Word. Why pay that much for something used so infrequently?

(Yes, yes, Star Office, Abi Word, etc. We don't have the time/money to do the training on them. And I don't have the will or desire to support them, (I'd do it alone, whereas others in the office would be willing to install/support more commercial based solutions.))

This isn't that wacky, actually.

So long as there still is an option to purchase at a flat fee for the retail customer, subscription licensing is a nice option to have. That's basically how most larger organizations (like mine) pay for Microsoft software today - and most of our other software, too.

I negotiate a price for the annual agreement, and the company, in turn, sends me discs (or gives me access to a download point) as long as the license is current. If we choose to extend the contract, we remain entitled to the product. If we don't renew it, we are legally obligated to get rid of it.

This is different from OEM licenses (which we don't get with our systems, since we have a Microsoft Enterprise agreement - so we don't have to pay twice) in that OEM software is licensed to the specific PC it enters the building with, and retail software which is generally allowed for a single PC, but you have the right to uninstall it and then reinstall it on a different system. Enterprise licensing is a flat fee per seat per year that covers Windows (any version), Office (any version Professional or below - not Premium), and BackOffice CALs to access the servers. If you subscribe to Enterprise and don't renew, you legally have to buy the software through other means (though the discs they send you aren't time-bombed) in order to keep using it.

It sounds restrictive, but it saves my company a lot of money, assuming I upgrade software every couple of years. It makes licensing a simple matter from a cost perspective, easy to track and predict, and the software we get already has product ID's burned into it so I don't have to use keys to install any of it.

In fact, my McAfee subscription works pretty much the same way (but for two-year terms), as do several of my other enterprise-wide products (and most of our mainframe applications). All this really does is extend the model down to smaller businesses and individuals who couldn't get on these type of plans before.

So I'd have to say I like it. So long as the traditional purchase option remains available, choice is a Good Thing.

- -Josh Turiel

Re:Good idea

No, I use Notepad or vi for just about any writing I have to do, but then again I don't do much writing....

Yes, but...

Why would I pay again and again for a downgraded version (10) when I already own a much, much higher version (2000)? Isn't this kind of like "upgrading" RedHat 7.0 with Linux kernel 2.0?

Sheesh. Do they really think we're THAT stupid?

What I would like to see

...is the messagebox that reads : "Please save your work. This copy of MS Office will autodestruct in 10,9,8..."

Why is this bad?

So Microsoft offers an additional option for people who want to use their software in terms different from the existing ones, and everybody just comes out and denounces them for giving their customers a choice. Yup, what a bunch of bigots on this site.

And don't come out with the crazy conspiracy theory that "Office 11 will be subscription only". First of all, it attributes to MS a level of stupidity they simply lack. And there is simply not basis for that statement.

Open source advocates are always talking about the virtue of choice, but when MS offers choice, they cry foul. How convenient.

Best thing to ever happen for StarOffice

...in about, oh, one year I bet a whole bunch of pissed-off IT managers move to StarOffice on a real (Solaris/Linux/BSD/HP) platform.

Sun should be working on an Enterprise-scal