Microsoft Introduces Pay-as-You-Go Computing

An anonymous reader writes "Geekzone is reporting that Microsoft is introducing a new business model for 'pay-as-you-go computing.' From the article: 'The pay-as-you-go computing model enabled by Microsoft's FlexGo technology allows customers to have a fully featured PC at home by paying only for the time as they use it through the purchase of prepaid activation cards or tokens. Microsoft has been running trials of the program in Brazil for more than a year and will soon be expanding to select markets in India, Russia, China and Mexico.'" This makes me giggle, because it's basically the return of time-sharing; in the past it was for for mainframe systems, but I suppose the same concept behind the mainframe idea would be true in developing countries today with PC systems.

On-demand computing

Not exactly time-sharing, but "on-demand" computing. Unisys [unisys.com] and IBM are doing this now - it's actually a new concept for them as well...

Why?

Why does it seem Microsoft is running out of good ideas? Pay as you go computing? How long would it be before you actually pay the amount that a new PC/Windows would cost for this? Is Microsoft going to be the next Rent-a-Center, where you pay $5000 for a PC that costs $500? Or pay $1000 for windows when it is in reality $200? heh, bad idea I say.

Re:Why?

Considering that they want 1/3 up front, and that the software is now the greatest part of the expense of owning a box, it would be cheaper to take that 1/3 and buy a lower-spec white box and throw linux or bsd on it, and pocket the difference.

After all, if they can't afford the box, they won't be able to afford the games and shite that require Windows either ...

With the mney they save, they can buy a Wii for their gaming fix.

Re:Why?

In case you haven't noticed, its now a LOT easier and quicker to install linux on a box than Windows, so Joe Sixpack is more likely to have success with his email, word processor, browser, etc. with a bare box if he tries to install linux instead of windows.

Steps to install OS and a ton of apps under linux:

1. boot off install dvd
2. answer a few questions
3. when dvd tray opens, remove dvd and reboot
4. set all apps and os to auto-update

Steps to install OS and a ton of apps under windows:

1. run install cd
2. answer a few questions
3. when cd tray opens, remove cd and reboot
4. for driver_cd in driver_cds: cross fingers; GOTO 1
5. ... some time later ...
6. insert app cd
7. answer a few questions
8. for app_cd in app_cds: GOTO 6
9. update antivirus
10. set OS to auto-update
11. set antivirus to auto-update
12. every once in a while: pay to update apps
13. once a year: reformat to get rid of spyware/malware/trojans/etc; GOTO 1

Re:Why?

where you pay $5000 for a PC that costs $500

*cough* Apple *cough*. :-)

Oh you meant over time in installments... hehehe.

Innovative strategy

It seems they've spotted a good niche. From MS website:

In many countries around the world, people face two main barriers to owning a PC: the entry cost of buying a computer is too high and the fixed monthly payments associated with traditional financing are beyond their ability to pay- if they can get financing at all. And even in countries where consumer credit is available, many people are reluctant to incur the obligation of fixed monthly payments because they have unpredictable or variable incomes.

All fair points.. it will be interesting others in the industry take up the idea.

Giggle giggle

This makes me giggle, because it's basically the return of time-sharing; in the past it was for for mainframe systems

When you stop giggling you may as well notice both have nothing in common.

One is a payment model for using licensed software (but time is not limited by demand, just by your money), and the other is an early form of multitasking, allowing more efficient use of the mainframe resources.

Re:Giggle giggle

It sounds like you aren't aware that time on mainframes was often leased in the past? Making the comparison reasonably valid.

Re:Giggle giggle

Hello young un.

When I first started work, I had to log the time that I logged into my terminal and logged out again into a black book. This was so we could double check against the seemingly extortionate amount of money the time sharing bureau charged us for the time spent on the computer that was on the other end of the line from my terminal. This was around 1983, which will have been towards the end of a practice that had been going on since the 1960s.

Oh, and your comment about this latest scheme being about licensing software is wrong too. They're hiring the hardware as well as the software. Just as they were in the old time sharing days.

This is just sub-prime financing

It's the same tactic used to lease-to-own cars to people who can't really afford them

FTFA:

1. An individual purchases a PC by making an initial payment equivalent to one-third of the total cost. A third party financial institution pays the retailer the remaining cost of the PC on the buyer's behalf.
2. The buyer agrees to purchase 800 hours of time on their PC at a low hourly rate - they can add time as frequently or as infrequently as they choose and take as long as they need to purchase the hours. The cost of the 800 hours covers the re-payment to the financial institution (including interest).
3. Hours of PC usage can be conveniently purchased over time through a variety of distribution channels, including convenience stores (scratch cards), ATMs, Point of Sale networks and the internet.
4. Once 800 hours of usage time is purchased, no additional payments are required to use the PC.

In other words, if you don't qualify for the loan as per item 1, you don't get to "long-ter lease" the box. So why not just borrow it outright and not be stuck paying per hour? Or take that 1/3 cash down and buy a used PC.

Re:This is just sub-prime financing

FTFA: "Genuine Microsoft"

So you're going to have to pay for the time you use to download and install all those patches, updating antiviruses, as well as the time your box is being p0wned and sending out spam, etc.

Of course, if you can't afford to own your box, you can't afford a fast connection, so you're going to spend more overall just maintaining your box.

For the 1/3 they want up front, buy a plain beige box outright and run a free os. After all, its not like these people are going to be able to afford to blow big bux on games or other software that runs only on windows.

The Palladium Killer App

I can't for the life of me imagine how they are going to enforce this except with Trusted Computing. The only way that they are going to prevent someone

  * Imaging the drive
  * Installing another OS of their choice
  * Using the computer as much as they like
  * When the agreement ends, replace the drive image.

Ok, if you sick a lawyer on the poor user, you can sting them for their minimum 800 hours fees. But the only way they could prevent the above is by locking the machine down at the BIOS level with TCPM support.

Re:The Palladium Killer App

I can't for the life of me imagine how they are going to enforce this

obviously you have either never signed a contact before in your life, or you don't have much of an imagination.

Re:The Palladium Killer App

Give the man a cigar!

Now, the question becomes whether you can extract 1/3 of the value of the PC in parts.
Question is only valid for the components that don't require TCPA to function at all.

What--TCPA required in individual components? I thought this was just a motherboard thing so we couldnt' run Linux and pirate CDs?
Guess again, Sunshine.

Wanna upgrade your monitor?
Sure. But don't bother trying to find a local source for that Lucky Goldstar monitor you found on that Korean website.
Only [Dell/Gateway/Microsoft/Walmart/Cosco/YouNameIt] monitors (rebranded LG monitors at three times the price, natch) will work, though.

Man, this is freakin' fantastic! Hardware compatability (no--hardware functionality--this keeps getting better!) will be strictly at the whim of the vendor.
Five years from now, "obsolete" won't mean "still does what it did when you bought it, but there's shinier stuff on the shelf this week"

"Obsolete" will mean: Vendor support for this version of hardware has ended:

• Due to privacy/security/safety/regulatory/end-of-lifecycl e (take your pick or add your own)... concerns, the following models and versions of [product] have been removed from the list of supported hardware.
• [Company] holds in the highest regard your rights as a consumer to maintain control and possession of products that you own. However, please note that the following functionality must, by law, be disabled for non-supported hardware:
  1. Connection to any other hardware, including network devices.
  2. Connection to any wireless network to which any other hardware is connected.
  3. Installation or execution of any licensed software.
  4. Playback, Recording, erasure, or transfer of any media.
  5. ...
• This protects the rights of all consumers to access shared resources without risk to security/privacy/.... caused by unregulated or "rogue" devices or persons.
• We apologize for any inconvenience this may cause and direct you to our new line of supported products, avaliable at....

DMCA already means you'd be insane to risk hacking your hardware to get it working again.

And recycling laws will mean the hardware has to go back to a licensed recycler
So, don't try to sell it to a guy what knows a guy what can get it workin' again...

Ingenious

Pay-as-You-Go rates force you to shutdown/reboot long before the computer crashes on its own.

Won't work

From the Microsoft page: "makes it easier for people with modest incomes in emerging markets to buy a full-featured PC for their families"

The true is that "people with modest incomes in emerging markets" don't buy software. Even when buying a new computer, big retails shops bundle Linux, that is removed as soon as people see they can't play games or use Encarta or Word or any other well known software. On the newspapers in Argentina, you see there is a standard fee for "linux removing" (and Windows installing, not advertised). In small computers shops, they preinstall WindowsXP without even asking (without licence). Most software is available for u$2 on CD-R (is advertised on any newspaper and even phone booth).
Only big companies (mostly from overseas) can afford to buy software.

All of a sudden...

... As soon as they read this, thousands of CIOs, PHBs, and Microsoftie system administrators realize Linux IS ready for the desktop, and introduce large-scale plans to switch all their users to ______________ [insert favourite distribution here], stat.

Panic seizes Wall Street, Microsoft stock dives, NASDAQ tanks, Bill Gates become the 100th richest man in the world, and Congress introduces law designed to protect "American innovation and competitiveness against the evil, communist, terrorist-sponsored opensource software".

Hey, one can dream, right? :-)

a fully featured PC ....

You mean a PC that includes:

An office suite. [openoffice.org]

A standards compliant browswer [mozilla.com]

Maybe a simple image editor [sourceforge.net]

And maybe [7-zip.org] a couple [sourceforge.net] of small [utorrent.com] utility programs. [sourceforge.net]

Yeah, I guess that would be worth paying for....
I mean, it's not like people are giving it away for free.

Re:a fully featured PC ....

This is not a Google search [google.com] outsourcing facility. Now to contradict myself by providing you with some positive reinforcement for your rudeness.

• Cinelerra [heroinewarrior.com]
• LiVES [sourceforge.net]
• FFmpeg [sourceforge.net] (conversions)

Filthy

This makes me sick to my stomach. The real geniuses of Microsoft, the ones working in the money dept, have come up with a way to drip feed the poor with an operating system they couldn't afford before (instead of choosing one they can afford), reinforce the idea that you're only renting access to software, and come up with a way to get more data on peoples' computer usage, all in one fell swoop.

And cue the anti-Slashdot trolls bitching about how we see everything MS does as evil...

Re:Filthy

a way to drip feed the poor with an operating system they couldn't afford before

This is about much more than an operating system -- it encompasses the entire hardware. The Windows OS is just a fraction of the cost, however maybe only Windows OS supports the pay-as-you-go integration with the hardware right now. The same model could be used to buy a machine that runs Mac OSX or Linux. It's a novel idea and an alternative to the $100 PC.

And of course, youll want a broadband connection..

...which will be another $30/month

This is Microsoft's answer to the $100 computer

If the $100 computer with open source software is the liberation theology of the information revolution, this is the indentured servitude of the information revolution.

So now you know...

...why Microsoft is so dismissive of the $100 PC.

Re:So now you know...

Two projects: The Microsoft rent-a-computer project, and the $100 laptop project.

One of these projects is attempting to empower the 3rd world, and the other project is attempting to enslave the 3rd world.

Can you guess which is which?

MS reaching for its dream

MS has been trying that concept for years. Some might remember when Gates introduced the idea that you won't even have to install Office or any Program anymore, you just stream it from the 'net. Someone must've told him that this would mean load times of a few minutes, or we'd have seen something like that by now. But when you look at the Office Document format, you'll notice it is actually a streaming format. Not necessarily something you'd expect in an "ordinary" file format, more something to be expected in a format that is supposedly loaded through a slow net connection.

That MS-Office can't "open" a document until it has loaded it entirely is a different matter. But in theory you can stream docs.

But back on topic. MS has been dreaming in this direction for a while now. After all, look at the advantages for them: First and foremost, full application control. It would even be possible to limit the capabilities later. Currently, you have the "problem" that, if something is possible to the user that the user deems beneficial but you don't enjoy in your software, you have a VERY hard time convincing him to upgrade to the next version, that has more features you want but less of what the user wants.

Then of course recurring revenue. Now, you buy Office and you use it. Forever. I'm pretty sure I'm not the only one who still has an Office97 running somewhere. Why upgrade? Newer versions don't offer any benefit. The only ones who do actually upgrade are companies that already fell for the "corporate agreement" bundle. But that doesn't offer ANY benefit for the average person.

This is just an attempt to force this kind of "agreement" down our throats. Since, after all, it's just a few cents every time you use your Word...

Is Microsoft Jumping the Shark?

This sounds like a "jumping the shark" move for microsoft, especially in India, Russia, China and Mexico.

And what about Total Cost of Ownership... Oh wait, that's Microsoft's TCO, not the users... ;-)

Re:First Post

guaranted by Microsoft to work expectedly

They can't do that now, how do you expect them to do that in the future?

Besides, if you look at how it works, you'll see that it really is the shits ... you get a 12-character code every time you want to "add minutes." How much you want to bet there'll be a keygen and spoofed add-time servers if this catches on?

... and the big hack - boot from a linux DVD and bypass it all.

Re:First Post

I see from all the -1 Flamebait mods that Team99 is out in force this morning ...

The simple fact of the matter is that this whole plan shouldn't be called "Pay as you go" but "Pain as you go."

Its targeted to people who can't afford it and would be better off using a free OS on hardware they can buy outright for the 1/3 down that this thing goes for ... or they can buy a used box if the really really really want Windows.

Re:Cool

It ought to be a challenge, if nothing else.

It looks like Microsoft has chosen Transmeta to provide the processors, with some hardening features implemented within Transmeta's CMS (Code Morphing Software) technology I presume. They claim it's quite well-hardened against hack attempts.

http://biz.yahoo.com/bw/060522/20060521005028.html ?.v=1 [yahoo.com]

Let the arms war commence!