Live from Las Vegas: Microsoft announced a new subscription-licensing model for the next version of Office this week, detailing what the company says is a preview of its future revenue model. Office 10, as the product is now known, will be offered in three major versions, a normal non-subscription retail version, a new subscription version, and a version called Office Online, which is designed for the ASP market. The subscription version of Office 10 will be available at a significantly lower cost than the normal version and will work for a year. When the yearlong subscription period is over, customers can use the Internet, a retail store, or the telephone to renew the subscription for another year. Rightfully so, Microsoft expects this new type of Office product to be a big success.
"We're really excited about this, said Microsoft Office Product Manager Lisa Gurry. "For our home users and small business users, this is a great way to get Office at a significantly lower cost." Gurry noted that the pricing for the Office Subscription hadn't been set yet, but that Microsoft would make the price point appealing. "We're going to make it very attractive," she said. "We know that it has to be appealing for this to be successful."
By lowering the entry cost for the next version of Office, Microsoft hopes to open the product to people who may not have otherwise considered upgrading. The company realizes that many people are uninterested in upgrading with each major product release, but the new subscription model may very well change the way this type of software is marketed and sold. Gurry noted that the renewal price for Office will be the same as the upfront cost, so users could easily change to a different version of Office (say Premium or Professional) if they find that they need more or less functionality than is provided by the version they're currently using. Customers that decide to not renew the product will still be able to use Office 10 to open, view and print their existing documents after the subscription period runs out, but they will not be able to modify them unless they renew.
I also discussed Office 10's first public appearance at the Gates keynote with Gurry and Lead Product Manager Tom Bailey. They are understandably excited about the new product, which should ship in mid-2001. "A lot of the functionality in Office 10 is designed to more easily expose the technology that's already available," Gurry noted. "Features like Smart Tags and the Task Panes are designed to make it easier to get at functionality. The ability to just work smarter is really resonating with our users and testers." Bailey agreed, adding, "We're melding the new with the old. Office 10 is also delivering new features, such as the reliability enhancements and voice."
Sometime next week, I will have a review of Office 10 Beta 2 available on the SuperSite for Windows. Stay tuned