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Can Microsoft Really Convince People To Subscribe To Software? 297

Posted by timothy
from the file-formats-are-what-matter dept.
curtwoodward writes "For most consumers, monthly subscriptions are still something for magazines and cable TV. With Office 365, Microsoft is about to embark on a huge social experiment to see if they'll also pay that way for basic software. But in doing so, Microsoft has jacked up prices on its old fee structure to make subscriptions seem like a better deal. And that could really leave a bad impression with financially struggling consumers."
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Can Microsoft Really Convince People To Subscribe To Software?

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  • by Anonymous Coward on Saturday September 22, 2012 @12:36PM (#41421735)
    The icon was the Borg Gates, now it is just a word.
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Maybe because Slashdot finally realizes that no one else in the world but hopeless Linux fanbois associate Gates with Microsoft for about the last five years.
       
      Could Slashdot finally be ready to grow up? Let's hope so. Steps in the right direction was getting KDawson and CmdrTaco out of here, maybe this is a good next step to moving back to being a tech site and not a garbage dumb for raving lunatics with a chip on their shoulder.

      • by fuzzytv (2108482) on Saturday September 22, 2012 @01:07PM (#41421997)

        Yeah, we want Borg Ballmer.

      • by hairyfeet (841228) <bassbeast1968@NOsPAM.gmail.com> on Saturday September 22, 2012 @04:51PM (#41423535) Journal

        Uhhh...how EXACTLY is this flamebait? Gates hasn't been the guy in the big chair in a decade, hasn't even been showing up for much of anything in half a decade. Sure he still has a title but he has made it clear he's too busy with his charity and he's NEVER coming back...which is a damned shame since his hand picked little buddy is a PHB right out of Dilbert but there you go.

        I've said several times its time to update the icon, I'll even happily give you a more appropriate image. Picture Ballmer with his tongue sticking out and a MSFT Beanie on, now THAT would pretty much nail what MSFT under Ballmer is like, a "we don't give a shit" attitude with kiddie designs. If you wanted to add delicious icing to that moist cake simply add his bust instead of just his head so you can see his T-Shirt reads "I Heart tablets and phones" which shows all they really seem to give a crap about now.

        But Gates is long gone, having the Gates borg makes about as much sense as bitching about Jobs and Apple when he was running NeXT and Scully was at the helm, he just ain't there anymore. Hell anybody who saw Gates coy remarks about Vista before release knows the man ain't in charge anymore or else he wouldn't have let that stinker out the door.

        • by Genda (560240)

          Yeah, everyone new Scully couldn't run Apple without Mulder... The OS-X Files... lovin' it...

    • by daremonai (859175) on Saturday September 22, 2012 @12:49PM (#41421849)
      The old one got assimilated. Yes, corporate dronedom is even more powerful (or at least more stultifying) than the Borg.
    • Re: (Score:3, Informative)

      by Haxagon (2454432)

      This is the "Businesses" icon, not the Microsoft one.

  • by click2005 (921437) * on Saturday September 22, 2012 @12:39PM (#41421761)

    If you liked Microsoft Tax you're going to love Microsoft Rent.

    • Indeed. MS has tried this before with their software assurance scheme, and the customers got burned.

      The customer thinks "Oh, this way if there's an upgrade that year, I automatically get upgraded for free!"
      MS thinks "Once I have you paying for software as a service, I don't need to push out upgrades as often to maintain my revenues."

      Upgrades become a rebranding of the previous year's, with minor usability tweaks / new logos / icons. MS needs to go on a diet, and get its mojo back...sticking it in front of t

  • LibreOffice (Score:4, Informative)

    by JayRott (1524587) on Saturday September 22, 2012 @12:40PM (#41421771) Journal
    At least for my needs, LibreOffice takes care of everything I have to do. Perhaps if more people were educated about alternatives it would knock some steam out of Microsoft. I understand that enterprise would be a hard sell, but on the consumer level it is doable.
    • Re:LibreOffice (Score:5, Insightful)

      by fuzzyfuzzyfungus (1223518) on Saturday September 22, 2012 @12:53PM (#41421877) Journal

      What Microsoft really appears to fear is the fact that MS Office versions N-1,N-2, and often even N-3 also take care of everything most people need to do.

      They aren't simply adding a subscription option, they are nontrivially bumping the price of the perpetual license options...

    • LibreOffice is fine by itself, but it is not sufficiently compatible with MS products to allow you to share files in a MS dominated environment. I made several attempts over the years to get by with StarOffice, OpenOffice, LibreOffice and just couldn't manage it - I wasted too much of my and my coworkers time dealing with file incompatibility issues.

      Software is a strong natural monopoly and MS has a very strong position in the desktop office market. I don't blame them for trying to milk this position for a

      • Re:LibreOffice (Score:4, Interesting)

        by zippthorne (748122) on Saturday September 22, 2012 @01:12PM (#41422051) Journal

        Yeah, but how often do you need to share files in a mixed environment like that. I think a business that is currently MS Office will either stay with Office, or they will put one of the OO.org forks on every machine and internal sharing will just switch to ODF instead of OOXML and the old documents/templates will be converted/recreated and deprecated over time.

        You only need to be able to share documents while you're collaboratively working on them. Once finished, they should be baked into PDF or paper anyway.

        • Re:LibreOffice (Score:5, Interesting)

          by TCPhotography (1245814) on Saturday September 22, 2012 @02:55PM (#41422799)

          It's not just migrating the office suite, it's everything. At school every major piece of software I use (Matlab, MathCAD, & Solidworks) integrates with Excel. This means that to migrate away from MS Office I have to have all three of these programs work with the replacement. Good luck getting people to migrate until you have that compatibility. This does seem to be something that I don't see brought up all that often, and yes it is important.

    • by jbolden (176878)

      It is happening in both consumer, small business and enterprise. Many stats have the OO family around 18% marketshare.

  • Offer me a 12€/year subscription for continued support of Windows XP and I'll sign.
    • Windows XP reaches EOL in April 2014. Then it becomes about as unsupported as Windows 98 in regard to security updates. I know the corporate environment I work in is migrating to 7 completely when our E6410s are replaced.
    • by jbolden (176878)

      Find another 50m people who agree with you about being will to pay and talk to Microsoft.

  • Hopefully no (Score:5, Insightful)

    by jbernardo (1014507) on Saturday September 22, 2012 @12:49PM (#41421853)

    Going back to the time-sharing days is not something most of us would like. The PC revolution was all about empowering the user, the subscription/cloud model is all about giving control back to big companies.

    I hope it won't happen, but after seeing the queues to buy a overrated, expensive toy this Friday and assuming there are that many ready to part with their money in exchange for a locked system, I really don't expect it to fail. There are many that will trade freedom for (assumed) convenience too easily.

    • by jbolden (176878)

      When the PC revolution started getting PCs working was far more expensive and far more difficult than getting the developer SDK working on that expensive locked down toy. Maybe the people in line aren't the only ones you should be looking at regarding trading convenience for freedom.

  • by Sponge Bath (413667) on Saturday September 22, 2012 @12:49PM (#41421855)
    If Microsoft offers a better deal for subscriptions than a perpetual license, people will take it. My guess is Microsoft will use subscriptions as a shell game to extract more money from consumers, which is not a better deal.
  • The last Microsoft Office product I bought was Word 97. I've been using OpenOffice, then LIbreOffice, since about 2002. It's a OK word processor, a mediocre but adequate spreadsheet, and a better draw program than Office. What's in Microsoft Office that a home user would need, let alone pay for monthly?

    • by Missing.Matter (1845576) on Saturday September 22, 2012 @01:10PM (#41422025)

      It's a OK word processor, a mediocre but adequate spreadsheet

      With a shining endorsement like that, who wouldn't want to use it?

    • by mwvdlee (775178)

      Google Apps has an "OK" word processor and a "mediocre but adequate" spreadsheet, and both work well enough for most things I want to do with them.
      LibreOffice is well beyond what 90% of business and home users need... except that the outside world demands all "interchangeable" documents to be in MS-only file formats.

    • by Anonymous Coward on Saturday September 22, 2012 @02:01PM (#41422441)

      You might be surprised. Many people do more with their home computers than just Farmville and porn.

      People volunteer for non-profit organizations, join the board of the PTA or their homeowners' assocation, start a small business, help with their kid's little league, work on a master's degree, and more.

      Google Apps, Libre Office, and the other suites out there... like you said, are mediocre. Yes, you can write a letter and track your DVD collection. And it's also true that a ton of people barely use 5% of what Word, Excel, and the rest of Office can do.

      But then you have this whole subset of "home users" who are professionals using Office at the home for more than just their shopping lists. They need the features (and ease of use, and support, and templates, and clip art, and and and) that Office offers. The features that they use when they're at work -- creating complex budgets, slideshows, long documents -- all get used at the home as well.

      And so I don't buy the argument that Office doesn't have anything that a home user needs. Because for a lot of people, home users are doing a lot more than you're giving them credit for.

  • by roc97007 (608802) on Saturday September 22, 2012 @12:53PM (#41421873) Journal

    So, my Office suite was purchased back in the latter half of 2000 (maybe first half of 2001, don't exactly remember). It still works fine, and I haven't spent a dime on it since then.

    Back in the bad old days, when we were forever reaching for that next release of the OS or that next release of Word in the hopes that it would crash less often and we could actually get some work done, Microsoft built a business model based on expensive incremental releases (a similar game to what Apple is playing now with hardware) and we all went along with it because we needed something that worked.

    To a certain extent, Microsoft is now a prisoner of their own success. For the great majority of users, Office stopped progressing over a decade ago, and Windows stopped progressing in 2002 (xp sp1). There is no longer any need to go out and buy every new version. Hasn't been for awhile.

    The problem is, Microsoft relies on that new release income to function, and I'm sure they're worried. Now comes a new paradigm -- software rental -- that guarantees it. I'm sure that seemed like a great idea, and I'm sure the person who came up with the idea of jacking up the prices of their non-subscription products got a big ol' raise.

    The thing is, there are fewer and fewer reasons to stick with Microsoft products, and more and more ways to migrate off them while maintaining backwards compatibility. If you stick with the mindset that "we are microsoft, and people will buy from us for that reason only", the strategy makes sense. But I wonder if the premise is true anymore. Personally, if and when I can't use my old crufty copy of Office anymore, I will actively seek one of the free solutions before allowing myself to be locked into a Microsoft solution. It's just self-preservation.

    • by zippthorne (748122) on Saturday September 22, 2012 @01:19PM (#41422105) Journal

      Interesting idea - that the document applications are basically mature, and not much more is needed/desired on the part of users.

      In a world like that, you would expect development of new office suits to slow, and the department sizes to shrink. Ongoing development for the trickle of new features and bugs that need to be corrected, but on a much smaller scale than originally. Same as with operating systems.

      I think maybe it is unreasonable to assume that a company in an expanding market would forever grow or even never contract. Surely as computers become ubiquitous, the purchases will only be for replacements, which one would expect would be lower than the peak where new units and replacements were being purchased.

    • by Dan East (318230) on Saturday September 22, 2012 @01:21PM (#41422113) Homepage Journal

      You hit the nail on the head. Office reached good-enough stability, and good-enough feature set, several years ago. They have more recently gotten into the "change for the sake of change" phase, and have been redoing GUI, etc, just to have something to promote with the product. Now imagine if customers like you and I (I'm using Office 2003 on my Windows 7 laptop - as my primary work machine has died and been replaced several times over the years, I've just moved my Office license along with me) didn't have the opportunity to have "bought" and owned Office a decade ago. Instead we had to pay a never-ending recurring fee. I think it's exactly users like us that Microsoft no longer makes money off of, and going with a subscription model is the only way they can try and prevent this from happening in the future.

      Granted, they aren't going to get many of us in on this new scheme - we already demand a "fair" method of owning software licenses that have value in the long term future, and most of us will simply switch to other alternatives. However there is a new generation of users coming of age, who are more "plugged in" and used to things being connected to the "cloud", or totally web based, or software at least checking online for "updates" and "synchronizing" when it starts up. There are a large number of iOS / Android games which, even though they SHOULD be able to run happily 100% offline, will only function when they have network connectivity and the user is signed in. What this is doing is conditioning a new generation of software consumers to a new level of control, connectivity and oppressive DRM.

    • I have to agree with you on the progression in Office - the feature set has been there since probably Office 97 for most of the apps, but 2003 for Outlook. While Office 2007 is a huge progression in UI (argument over backwards vs. forwards aside) it does not add much of anything functionally for me, with the exception perhaps being the mouse over menu popup and the context sensitive toolbars, which are significant as far as usability goes but don't necessarily add additional function.

      However, I think you'v

    • by jbolden (176878)

      You should take a look at the last decade of server support for Office. Office as a product line is way, way ahead of where it was 10 years ago. You don't use those features though which means you probably should be dropping down from a premium office suite.

      If you aren't a demanding user and thus aren't willing to pay much... why should Microsoft care if they lose you?

  • by X!0mbarg (470366) on Saturday September 22, 2012 @12:58PM (#41421911)

    If such a scheme is introduced, it will cause/fuel a renewed proliferation of Crack and Hacks that will really cost M$ serious money in the long run.

    Since older versions still abound, and I am quite confident that there are more than a few of us that will simply hold on to those versions until it is simply impossible to do so any more. By then, there will be a Free alternative, and M$ may have learned its lesson.

  • Sure (Score:2, Insightful)

    by kenholm3 (1400969)
    People subscribe to stuff (software) all the time. How many folks pay for WoW? How many businesses pay "annual maintenance" which akin to a subscription.

    As for folks liking FOSS, it's still there. If FOSS was that good*, MS would not sell as much as they do.

    *I'm an old *nix guy. I ~do~ dig FOSS, when it's appropriate. Currently, MS Office is the defacto standard in the business world.

    I know it's cool to gripe about MS and Bill Gates. I prefer to waste my time on other things. And, I've ~never
  • by Causemos (165477) on Saturday September 22, 2012 @01:08PM (#41422013)

    If they are already getting monthly/yearly fees from customers, what's the incentive to produce good products? Now we get to vote by not buying that version and continuing to use an old one. With this new model they'll get money either way.

    Their hard core users will probably pay, but many people are occasional users. Free and/or cheaper products will make out big on this. Word processing and spreadsheets aren't exactly cutting edge applications anymore.

    • by jbolden (176878)

      Sure they are. There are wonderful BI features in spreadsheets today that didn't exist 10 years ago. There are wonderful multimedia and collaboration features in word processing that didn't exist 10 years ago. You just don't use those features. Which means you shouldn't be running a premium suite.

  • As a long term MS user. I find this as a mistake. I don't like cloud computing BTW and i'll keep my stuff here at home not on someones server. Why should i pay someone to keep my files when i can do just as carefully here?

  • by kelemvor4 (1980226) on Saturday September 22, 2012 @01:16PM (#41422079)
    I don't think most consumers will go for it out of the box, but I bet windows 8 pc's will come with some free limited time subscription. Then people will be tempted to continue paying some monthly fee. Same thing with pay per month or micro transaction video games.

    Corporations will probably like it because many seem to prefer leasing or otherwise renting over buying.
  • by djl4570 (801529) on Saturday September 22, 2012 @01:20PM (#41422111) Journal
    Back in 1998 one of my colleagues expressed a favorable attitude towards the pay per view technology being marketed by Circuit City as Divx. I gasped and suggested an analogy of having to pay Microsoft a dime every time you used MS word or even worse, every time you saved a document. While not the same as subscriptions the concept is similar.
    Office is deeply entrenched in the business world so this move could be a financial bonanza for Microsoft until the business world rebelled. Lotus Notes (Which IMNSHO sucks big green donkey dicks.) could replace Outlook and the Lotus suite of apps based on Open Office could replace the balance of Office. Courageous management would dump commercial software and go with Open Office or Libre Office.
    Big challenges are user training and finding a replacement with the same kind of email and calendar integration that Outlook offers. I work for a large tech company. Being able to schedule meetings and conference calls, and getting reminders of same makes the work day flow smoothly. At least until your exchange server becomes unreachable.
    We need a Darth Balmer icon for Slashdot.
  • Adobe started the "rent" thing a couple years ago. I guess it works IF you need to upgrade all the time. But if you feel you can skip an upgrade you're SOL.

  • Adobe, or open-source stuff....
  • by twnth (575721) on Saturday September 22, 2012 @01:34PM (#41422211)

    I have a personal technet subscription, which is effectively renting MS products (annual fee, access to latest software, and other goodies)
    Work has enterprise licencing, which is not much different.

    so... some of us have been renting MS software for years.

  • to fdisk ms_windows off my PC and install Linux
  • ...unless I keep getting the $10 versions from work home use program (HUP). The problem with HUP is I can select (currently) either Office 2010 or Office 2011, but not both (just in case it's not obvious, the former is Windows, and the latter is Mac OS). And yes, I want and need both.

    My company uses Windows workstations, but I prefer Mac OS at home. Most of the time, Office:Mac is just fine. Except, you know, the glaring omissions of Access and OneNote, which cause me to have to boot up Parallels (less of a

  • by fragMasterFlash (989911) on Saturday September 22, 2012 @01:47PM (#41422343)
    If you do signup for an MS Office subscription, make sure you uninstall the software before the subscription expires. Some of the most badly-borked systems I have encountered in the past three years have had a pre-release version of Office installed that went beyond its timebomb date. I expect similar badness to occur with systems where an Office subscription has expired.
  • Considering what a pile of substandard trash things like Office are, that they still have not caught up with open standards and are lagging behind badly on the OS front, I would think that people are morons and MS marketing realizes that and knows how to play them well.

    Therefore I predict this will be a huge commercial success.

  • With my broadband internet connection. I pay the same price for 150/10Mbps pipe that I used to pay for 60/6Mbps one, so I could say that those licences are really free. I guess that's one way they can convince people to use them. I have no choice to give those licenses back and get a discount. I don't think Microsoft has nothing out of it.
  • by atarione (601740) on Saturday September 22, 2012 @01:56PM (#41422409)

    Despite having technet, I still use LibreOffice more than Office ... I have both installed but i kinda like the interface of LibreOffice more.

    If I have friends / family that ask about this .... well technically whenever i have had friends /family complain about buying office i have just told them to try OpenOffice before then LibreOffice now. Most of them tried open/Libre office and decided it was pretty good ...and really good for free and just used that.

  • When I get a Word file from someone for review, I feed it to an online MS Word PDF Printer, then scribble all over the PDF file with Xournal and send the resultant PDF back to the originator.
  • If you can write off the subscription cost in your business, then you can have some justification.

    But for a home users? The vast majority would likely be happy with the office version they bought with their computer, and using on their next computer if they could. They need to upgrade just about never.

    Getting roped into annual fees makes absolutely no sense in this case.

  • Not really a social experiment, is it? More a sort of, well, business one.
  • by nurb432 (527695)

    They have been on this sort of model for a long time with large customers.

    Nothing really new.

    But i do find it humorous as in the old days they were fighting against IBM's similar model with the big iron, and now we are coming full circle.

    Guess it wasn't so bad after all :)

  • They should have released office applications for iOS at 2x the price of their iWork equivalents. Then they should have moved all that into the metro style, and released basically the same metro designs for Windows 8.

    That might have cost them more than it produced in revenue, but now the result is that millions of people have been delightedly using their iPads for a couple years, and they're doing ok without MS Office. Even enterprise users. And MS still doesn't have an announced plan to bring Office to Met

  • One problem I have with MS software is that it is always tied to a machine. If that machine goes down, there is difficulty in getting another machine up and running quickly. With my home machines and most Apple software I have five concurrent licenses. Even with software that once only had one license, there was never a problem loading it on a new machine.I know this is not the model with MS, I mean every machine has a separate individual license and Office has traditional been paid by corporations and t
  • Microsoft thinks, "I am selling apples and oranges. I want to sell more apples, so I will jack up the price of oranges to force people to think my apples are cheaper. Profit!!!".

    But customers compare Microsoft's apples to Google's apples and apples from other vendors. The subscription based Ms-Office will live and die by its comparison to other subscription based document suites. Mainly google. Microsoft might bring in more backward compatibility with old office documents. ( on paper. In reality I find Ope

  • The trick to make it work is to offer the subscription at a really low price, for example, $5 per month.
    And they can use upselling by providing online backups, for example at $10 per month.
    This way, customers will think it's a great deal, because it adds real value.

    However, I'm sure it won't work, for several reasons:
    1) Microsoft will maintain their basic offer at $12.5 per month, which is too high. Come on, an Internet connection is cheap, and it's even more useful than Office !
    2) most of the users don't r

  • by cratermoon (765155) on Sunday September 23, 2012 @02:14AM (#41426291) Homepage

    In the days before the personal computer revolution, all software* was by subscription. Companies and universities bought hardware form the IBMs, Honeywells, DECs, and Amdahls of the world, but then paid a subscription fee for support in the form of maintenance and upgrades.

    Then the microcomputer came along, and there was no software for it at first, so people wrote what they needed. Some of it was good enough that people were willing to buy it, at retail, just like milk or bread. Some software vendors would support purchased software with upgrades, either free for a time or for small fees, but it wasn't subscription-based.

    Microsoft was one of the biggest forces in the world of boxed retail software. Remember the Windows 95 midnight release?

    A couple of decades or more later, and now Microsoft decides that the "pay forever" model of the giants it supplanted is the right path. While it is something of a regression to old ways, it's also an outgrowth of the absurd situation we've come to in copyright and licensing laws.

    What other models are there now? Apple sells you the hardware (computer or phone) and you get the patches and minor updates for free, but they push you to upgrade your hardware relatively frequently -- iPhone 6 anyone? Ubuntu gives you the OS, but they have deals with corporate partners and will probably be pushing ads into the os soon. A number of vendors give you the software, upgrades, and source, but charge you for the kind of "call up somebody and get this fixed now" support that management likes.

    The situation Microsoft is in may be unique, however, because they can no longer convince consumers -- or most corporations -- to get on the upgrade treadmill, thus they've lost their steady income stream. MS can't get their customers to cough up more money on a regular basis for the next version. Who can blame the customers when the difference between Office 2010 and Office 2013 is, well, what exactly is different, other than Metro? Why should anyone upgrade?

    This inability to keep pumping their customers for additional money to upgrade is the main driving force behind the subscription model. With a copyright regime which increasingly says the user only "rents" the software, and declining revenue from the Office cash cow, Microsoft really has only once way out: charging you a monthly fee for the privilege of editing your letters and calculating your spreadsheets.

    *footnote: except software you (the company, the university) wrote yourself.

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