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In a bid to drive new subscription-based revenue from
consumers, Microsoft plans to begin selling a subscription service for the home
and student edition of its Office productivity suite, starting in mid-July.
With its $69.99 annual subscription fee, the new Microsoft Equipt bundle may
appear like a swipe at software-as-a-service (SaaS) offerings, which are
delivered over the Web, and for which users similarly pay subscription fees.
But rather than getting its feet a little more damp in SaaS -- an area where
it's thus far been reluctant to wade too deeply -- Microsoft (NASDAQ: MSFT) has
other aims with Equipt.
The package includes Office Home and Student 2007 -- which typically retails for
$149.95 -- as well as a subscription to the company's OneCare malware protection
service, which by itself costs $49.95 per year. Unlike SaaS offerings like
Google Apps, however, the version of Office is traditional, packaged software
that users install on their hard drives.
As a result, one analyst sees Microsoft sticking to its guns by retaining Office
as pure software. Instead, it's OneCare that is Equipt's core focus, Matt Rosoff,
consumer affairs analyst at Directions on Microsoft,
"It looks like they are trying to spur adoption of OneCare by bundling it with
Office," Rosoff said. "I can get a security product from someone like Symantec
for $80 per year or I can get it with Office."
The idea is to lure customers in with a deeply discounted, packaged version of
Office as a loss leader while enlisting new subscribers to OneCare's anti-malware
and antivirus subscription service.
"With Microsoft Equipt, we're improving our customers' computing experience by
giving them essential software in a package that offers an easy install and
setup experience, as well as a convenient and affordable way to stay updated
with the latest versions of Office and Windows Live OneCare," Bryson Gordon,
group product manager for Office, said in a statement.
In addition to Office and OneCare, the subscription provides free updates to the
Office suite -- which includes Word 2007, Excel 2007, PowerPoint 2007 and
OneNote 2007 -- as long as users continue to pay the annual fee. Users also will
be able to install software on up to three PCs.
Equipt includes several already-free Microsoft Windows Live services, including
Live Mail, Live Messenger and Live Photo Gallery.
It's not yet clear whether home and educational users will gravitate toward the
offering, when it goes on sale later this month, in outlets that include 700
Circuit City stores in the U.S. The cost savings is likely to have at least some
appeal, Rosoff said.
"It's a pretty good value," he added.
Microsoft first announced Equipt, then codenamed Albany, in mid-April.
Even though the offering isn't targeting SaaS-based rivals such as Google
(NASDAQ: GOOG) Docs and Zoho Office Suite, that doesn't mean that Microsoft is
staying away from SaaS.
For instance, the company has shown some willingness to explore hosting
enterprise applications for businesses -- such as its Dynamics CRM Online
offering, which went live in April.
Additionally, application virtualization firm Endeavors Technologies in May said
the software giant plans to roll out upcoming software licensing changes that
would let companies stream Office applications to users' desktops.
Microsoft has yet to announce such a plan publicly, even though rumors had
previously suggested a June date for its unveiling.
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