Microsoft Expands Office Subscription Pilot

The software maker moves its pay-as-you-go program for Office 2003 into Romania and South Africa.

Microsoft is exploring new business models for Office in the emerging world, which includes expanding its pay-as-you-go pricing for Office 2003 in South Africa and Romania.

The Redmond, Wash., software maker announced July 17 a new offering, known as Microsoft Office Prepaid, for Office 2007 in those two developing countries. It will be priced at $28.54 for a three-month subscription for Microsoft Office 2007, while first-time users will get an extra three months free, Reuters reported.

A Microsoft spokesperson said the program was not an indication that the software giant was laying the groundwork for the rollout of Office as a service under Microsofts software-plus-services vision. Still, the spokesperson did not rule out the 2007 Office Prepaid pilot as a forerunner to an Office service.

Microsoft, which is also testing other pay-as-you-go programs, is "always looking at new ways to deliver productivity solutions and services to enable economic opportunity in emerging markets," the spokesperson said. "2007 Office Prepaid is currently being piloted in South Africa and Romania. However, we have nothing to announce at this time regarding Office as a service."

Office Prepaid uses the product activation technology found in many other Microsoft products. Users must first buy a new "Office ready" PC with Office 2007 installed. They will find a 25-character code on the back of the prepaid starter kit provided by their retailer that is used to activate the software over the Internet, enabling them to use the software for six months.

Users can then renew the subscription with a three-month prepaid renewal card, or they can convert it to an unlimited version with a traditional Office product. If they decide to let the subscription expire, they can continue to view and print existing documents and data but cannot modify or create new documents or data, a company spokesperson told eWEEK.

This move is part of the broader Unlimited Potential initiative by Microsoft to make its software more affordable in developing countries and to bring access to computing to another billion people by 2015, according to the spokesperson.

/zimages/1/28571.gifRead more here about Microsofts $3 software package for developing countries.

"Microsoft Office Prepaid represents Microsofts effort to explore new business models for Office. We are continually evaluating our business models for the developing world and will use our learnings from programs in South Africa, Romania and other markets to inform our long-term strategy for emerging markets," the spokesperson said.

Rob Helm, an analyst at research company Directions on Microsoft, said he has not been briefed on this latest Office initiative, but he told eWEEK that the move was clearly designed to help generate more revenue from emerging markets as Microsofts developed markets slow.

"Microsoft has been trying to find new licensing models that will shake loose more money from emerging markets, and this is simply a trial of new ways to sell the classic Office product to emerging markets," Helm said.

It is not a small-scale testing ground for a possible rollout of Office as a service, Helm said. "If you want an idea [of] what Office as a service might look like, take a look at SharePoint Server 2007, a product that already delivers a Web-based spreadsheet [Excel Services] and a forms data entry system [Forms Services, based on InfoPath]," he said. "SharePoint Server will probably be the vehicle for a future Office Server, which will also form the basis of an online productivity service. In fact, SharePoint Server—but not Excel Services—is already the platform for Microsofts Office Live service for small businesses."

/zimages/1/28571.gifTo read more about why SharePoint Server 2007 is an able jack of all trades, click here.

While Microsoft has been running pilot pay-as-you-go schemes for Office 2003 in South Africa and Romania since last year, this is the first time the company has included Office 2007, which was released to consumers in January.

This is also not the only pay-as-you-go program that Microsoft has been running: It has been testing a program for Windows, known as FlexGo, since May 2006 in a small number of developing countries, where both the PC hardware and software are leased.

Under FlexGo, users can buy computer usage time using prepaid cards, such as those sold by cell phone makers, from Microsoft and its partners, which include Transmeta, Advanced Micro Devices, HSBC Bank Brasil, Intel and Lenovo.

Microsoft is also believed to be considering adding Office to its FlexGo pilot program so that customers will be able to lease a single bundle of the hardware, Windows and Office.

But the spokesperson pointed out that Office has not been made available as part of the FlexGo program. "Its important to note that Office Prepaid is not reliant on FlexGo technology," she said.

Next Page: Threats from competitors.