Microsoft Hopes Office Subscription Plan Will Counter Free Software
http://www.informationweek.com/news/software/enter [2008-7-4]
Tag : Main Circuit
Equipt will be available exclusively through Circuit City beginningin mid-July.
More than anything else, Microsoft is counting on Equipt'sconvenience factor to help it fend off competitive threats fromGoogle, IBM, and other vendors that are offering free and open source desktop productivity suites that can be downloaded over theInternet and provide capabilities similar to Office.
"Consumers expressed frustration at having to spend time and effortinstalling different types of software, keeping current on newversions, and getting their computers set up. We're just making itreally convenient and painless for consumers to get up and runningin a few mouse-clicks," Microsoft group product manager BrysonGordon said in an interview posted on the company's Web site.
Equipt includes the Office applications Word, Excel, andPowerPoint, as well as OneCare, Messenger, and Photo Gallery, plusother applications and services.
Microsoft is hoping that's enough to prevent consumers frommigrating to free software. Google recently introduced its Google Docs package, which features functional equivalents of Office'smain applications and costs nothing.
Meanwhile, IBM is offering Lotus Symphony, another free desktopproductivity pack that's based on the open source OpenOffice.orgproject.
The emergence of free software could be hurting Microsoft's bottomline. The company said that sales of its Office products amongconsumers dropped 39% in the most recent quarter. The companyblamed most of the decline on the fact that the previous year'sthird-quarter results were significantly boosted by revenue thathad been deferred under an Office 2007 upgrade program.
Still, consumer sales of Office have shown no growth over the pastthree quarters, Microsoft said. The problem: Microsoft's Officerevenue typically jumps when a new version is introduced, thenquickly tapers off.
With Equipt, Microsoft is hoping to extend the consistent revenuestream provided by commercial Office licensees to the consumermarket, and it's hoping that everyday computer users will see enough value in the offering to forgo freesoftware.
"We found from our research that when you bring these categoriestogether and keep them automatically updated, a subscription modelmakes a lot of sense," said Gordon.
Equipt will be available exclusively through Circuit City beginningin mid-July.
More than anything else, Microsoft is counting on Equipt'sconvenience factor to help it fend off competitive threats fromGoogle, IBM, and other vendors that are offering free and open source desktop productivity suites that can be downloaded over theInternet and provide capabilities similar to Office.
"Consumers expressed frustration at having to spend time and effortinstalling different types of software, keeping current on newversions, and getting their computers set up. We're just making itreally convenient and painless for consumers to get up and runningin a few mouse-clicks," Microsoft group product manager BrysonGordon said in an interview posted on the company's Web site.
Equipt includes the Office applications Word, Excel, andPowerPoint, as well as OneCare, Messenger, and Photo Gallery, plusother applications and services.
Microsoft is hoping that's enough to prevent consumers frommigrating to free software. Google recently introduced its Google Docs package, which features functional equivalents of Office'smain applications and costs nothing.
Meanwhile, IBM is offering Lotus Symphony, another free desktopproductivity pack that's based on the open source OpenOffice.orgproject.
The emergence of free software could be hurting Microsoft's bottomline. The company said that sales of its Office products amongconsumers dropped 39% in the most recent quarter. The companyblamed most of the decline on the fact that the previous year'sthird-quarter results were significantly boosted by revenue thathad been deferred under an Office 2007 upgrade program.
Still, consumer sales of Office have shown no growth over the pastthree quarters, Microsoft said. The problem: Microsoft's Officerevenue typically jumps when a new version is introduced, thenquickly tapers off.
With Equipt, Microsoft is hoping to extend the consistent revenuestream provided by commercial Office licensees to the consumermarket, and it's hoping that everyday computer users will see enough value in the offering to forgo freesoftware.
"We found from our research that when you bring these categoriestogether and keep them automatically updated, a subscription modelmakes a lot of sense," said Gordon.
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