Microsoft launches Office rental deal

THIS MONTH MICROSOFT will launch an annual subscription offer aimed at consumers covering Microsoft Office and other applications, in partnership with US computer and electronics retailer Circuit City.

The consumer rental bundle, called Equipt, will include a copy of the Home Office suite - consisting of Word, Excel and Powerpoint - plus Windows Live Onecare, Messenger, and Photo Gallery software and services. Onecare provides a set of PC security and optimisation tools that can be accessed online over the Interwibble.

A subscription will cost $69.99 per year and will licence the products to be used on up to three PCs. Punters will automatically receive software updates, assuming that the company releases any.

Microsoft has offered enterprise customers software subscription plans for several years. For business users such programmes offer the advantages of automatic software updates and predictable costs. The Vole hopes consumers will buy Equipt for the same reasons.

For about ten years, give or take a few, Microsoft could pretty much count on most business and home users to upgrade to its new releases of both Windows and Office every two to three years. However, as its software products have matured such that successive versions aren't as attractive to provide bug fixes and new, useful features, now Microsoft is trying to convert as many of its customers as possible to an annual software rental model.

To the extent the Vole's customers fall for this, it can start collecting a continuing stream of revenue without having to develop new application capabilities and features or fix any but the most crippling and annoying software bugs. It's passive income at high monopoly rents.

Many casual Office application users don't use more than the most basic features, manage their PCs by a default policy of benign neglect, and don't engage in PC instant messaging or collect photo albums on their PCs.

Since the Home version of MS Office sells for only $112, such users might not see compelling value in renting Equipt for a $69.99 annual fee. µ