Microsoft Hopes Office Subscription Plan Will Counter Free Software - InformationWeek

With its Office franchise under onslaught from a host of rivals offering free software, Microsoft is hoping that a new subscription pricing theoretical account for its basis desktop franchise will promote consumers to go on upgrading to the up-to-the-minute editions of the product.

Microsoft said Wednesday that it will give consumers the option of purchasing an yearly licence for Office and its Live OneCare security bundle for $69.99 per twelvemonth under a programme called Equipt. The licence covers usage of the on up to three computing machines and includes entree to all hereafter merchandise upgrades.

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Equipt will be available exclusively through Circuit City beginning in mid-July.

More than anything else, Microsoft is counting on Equipt's convenience factor to assist it fend off competitory menaces from Google, IBM, and other sellers that are offering free and desktop productiveness suites that tin be downloaded over the Internet and supply capablenesses similar to Office.

"Consumers expressed defeat at having to pass clip and attempt installing different types of software, keeping current on new versions, and getting their computing machines put up. We're just making it really convenient and painless for consumers to acquire up and running in a few mouse-clicks," Microsoft grouping merchandise director Bryson Gordon said in an interview posted on the company's Web site.

Equipt includes the Office applications Word, Excel, and PowerPoint, as well as OneCare, Messenger, and Photograph Gallery, plus other applications and services.

Microsoft is hoping that's sufficiency to forestall consumers from migrating to free software. Google recently introduced its Docs package, which have functional equivalents of Office's chief applications and costs nothing.

Meanwhile, IBM is offering Lotus Symphony, another free desktop productiveness battalion that's based on the unfastened beginning OpenOffice.org project.

The outgrowth of free software system could be hurting Microsoft's underside line. The company said that gross sales of its Office merchandises among consumers dropped 39% inch the most recent quarter. The company blamed most of the diminution on the fact that the former year's third-quarter results were significantly boosted by gross that had been postponed under an Office 2007 ascent program.

Still, consumer gross sales of Office have got shown no growing over the past three quarters, Microsoft said. The problem: Microsoft's Office gross typically leaps when a new version is introduced, then quickly tapers off.

With Equipt, Microsoft is hoping to widen the consistent gross watercourse provided by commercial Office licencees to the consumer market, and it's hoping that mundane users will see adequate value in the offering to waive free software.

"We establish from our research that when you convey these classes together and maintain them automatically updated, a subscription theoretical account do a batch of sense," said Gordon.