Microsoft Office as a Subscription Service

Not too long ago, I covered the Microsoft Online Portal Solutions offering Exchange and Sharepoint capabilities as web services. Microsoft just announced that the Office suite will now also be a part of this approach. This is no surprise since Bill Gates mentioned that we would be seeing more and more of this from Microsoft to keep up with the competition, but also to offer more choices to the customers. The yet-to-be-released product, code named “Albany” will be a bundled installation available on a subscription basis.

With just a few clicks, “Albany” subscribers will be able install the whole package, which includes Microsoft Office Home and Student 2007, giving them the latest versions of Word, Excel, PowerPoint and OneNote for their personal and school projects; Windows Live OneCare to help keep viruses at bay and their computer fast and healthy; and Windows Live Mail, Messenger and Photo Gallery so they can connect and share with others. Albany also installs the Microsoft Office Live Workspace connector on the Microsoft Office toolbar, so users can save documents to their own dedicated online workspace and invite friends and classmates to collaborate and share.

Right from the start, we can see that the main difference here is that the product does not run directly in a browser like Microsoft Online, but is offered as a subscription-based download with updates for as long a you are a member. This is certainly a brand new approach for Microsoft who have always offered software on a license based model either per seat or per user.

The target audience for a product like this is limited because it is not for businesses and not everyone is inclined to having a bunch of Microsoft products pushed onto their machine. Microsoft’s point of view is that they are bundling the office software with a software segment that most users are willing to pay to get as a subscription: Security – They also aim for people who like to always have the latest version of everything installed on their machines.

Microsoft will be adding products to this new model to broaden the target audience and to better compete with their closest competitors for the online suites: Google and Zoho. A business version should also become available.

The beta version of Albany will become commercially available later this year and and pricing has yet to be established.

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