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How Will Subscription-Ware Affect OEMs?
TomCampion asks: "I've been reading a lot about how software makers want subscription-based services to be the norm, but how will OEMs handle the distribution of this new type of software? Today Dell ships a copy of Office 2000 that will run forever, but does this mean tomorrow they'll ship a copy of Office XP that will run for one year? How will this affect the prices of PCs?" I suspect that, if the foul idea of subscription-ware catches on, OEMs will effectively be relegated to the role of hardware pushers. The software will come foamed in with the hardware, with the install procedure being simple: plug in the computer and the phone line/network cable; insert the CD; and then turn the machine on. Your software company will then happily install all the software they think you'll ever need for a nice, (moderately) low, monthly price. Nice idea, however I don't think I trust commercial software enough for them to force this idea down our throats just yet. Do you?
Very well put Yoshi! TCO is something that's often overlooked by non-financial types, but it ends up right on the bottom line, IMHO.
Now, what they need to do to be successful in a subscription model is:
1. Make it less expensive than a full-refresh purchase over the same time period (12-18 months nowadays?). Would you rather pay $350 every year or two so for Application_Suite_XX, or pay $10 a month, and always be current?
2. INCLUDE SUPPORT!! By Odin, if you're paying a monthly subscription fee, you should be able to either call a human for help, or at the very least use a very responsive Web-based help desk for product questions...NOT just access to a knowledgebase (which itself is an oxymoron.)
3. Make the auto-upgrade process reliable, and recoverable. There's nothing worse than installing an update and getting a BSOD or equivalent. You should be able to roll-back upgrades that are of...sub-optimal quality.
4. Have a clear, well written and highly public privacy policy on any and all data you collect from users. Something to the effect of "No one outside our company will know anything about you unless they pry the data from our cold dead fingers, and we won't use it to sell anything to you, ever!"
5. Offer users a quarterly CD mailer with all the updates, at no additional cost. If they can put AOL CDs in cereal boxes for free, then a subscribed user surely deserves a CD every now and then.
6. Make it relatively easy to transfer licenses between computers. Once that old P3 reaches the end of its life in 4-5 years, you should be able to submit a web form, register the other computer as "killed", and set up the new one for no additional cost.
7. Offer a discout to multiple-PC users. To Big_Software_Company, there's very little incremental work required to issue a license for someone with two or three PCs as oppposed to one. So there should be a price break there. Say, $10 a month, plus $1.50 for each additional licensed to the same user.
In summary: If you make the process affordable, reliable, confidental and reasonable, there's nothing wrong with software subscriptions.
Or, put another way, if you don't make friends of your uses, they will make you.
Are you listening, Microsoft? IBM? Oracle? CA? Siebel? Sun? HP? Compaq?
I find it a little odd that everyone seems to be so negative about subscription fees for software. I mean, think about an apartment. There are two ways to get one; 1) buy 2) rent. Most people prefer #1 but cannot afford it and thus pick #2 and rent an apartment.
While most people on Slashdot think everything should be free (as in beer), the typical argument for *piracy* seems to be that "I can't afford to buy CD's / software with the current prices!". Well, with subscription, you *can* afford it so what's the problem?
Subscription already works for many things and nobody complains about it so why complain now? Personally, I'd prefer to own my software (and music) but subscription is a good thing and suitable for software in many cases - especially if it's offered as an option. Don't complain just because it's Microsoft that is doing it.
You're comparing apples and oranges.
First, this notion that subscription services will make computers more secure is unfounded. The key to security is control of access and I don't see how paying $19.95 a month for your software somehow makes it more secure. In order for that effect to manifest itself the software companies would have to do the following: a) offer security updates immediately upon availability (software would phone home regularly), b) update virus databases regularly, c) audit the security of the box (e.g. clear passwords, insecure daemons, etc.).
Why do you suddenly think that companies like MS are going to produce patches faster and audit the security of their customers boxes simply because they are now being paying a subscription fee? I certainly don't know the answer to that question and don't expect to see that scenario unfold.
The "VA Linux" model (I would have used Red Hat as an example, but whatever) of providing support for software that is Free can't be compared to a closed source software package being sold as a subscription. If you cancel your support subscription with Red Hat you can continue using your software; you just don't get help when you break something. If you stop subscribing to Windows you won't be able to run Windows any more. Big difference.
It is ironic that the software company poised to make money selling service and support is MS, not RedHat.
It's not "ironic." It's called Marketing.
--
Scott Brady
if you pretend that you're still going to be using those P3's running Office xxxx in 5 years time, you're wrong.
I plan on using my computer in 5 years. But then again I'm on a Mac.
Anyway, as long as this pricing doesn't move to games, I'm not too worried about it. There is a good explination of the technology over at Ars Technica
My main beef with this is: My parents bought a Pac Bell in Christmas of '99. While, I can't stand to use it, its fine for them. They don't need any more power than a K6-2 333 for the internet and checking e-mail. It came with Word 97 and that's the biggest piece of software they use. That being said, this computer came with virus protection. Which is all nice, fine, and good. Of course we all know that you've got to update your virus protection periodically. It logically follows that we had to pay to update this virus protection. In my mind, this is a perfect parallel with installing Office XP on a monthly subscription. If I can't convince my mother that we need to update our virus protection every month, how is Micro$oft going to convince her to PAY(I bought this computer it should work!) again just to use Word the 3 times a month she uses it.
This will be bad, because the vast majority of people that buy OEM will not upgrade their hardware every 2 years. This is why I wish those damn Internet Appliances would take off. My Parents don't need a full computer for what they do. and I know they don't need to be paying every month or year for software they don't always use.
11 was a racehorse
12 was 12
1111 Race
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1) Microsoft products suck.
2) Microsoft better not limit my access to their software.
What doesn't make sense here? I'm honestly confused.
"blue screen of death" gallery
This is the way forward, and it's not something to be afraid of. What people always forget, is that TCO is the only thing that matters. By having a regular upgrade/subscription cycle, we have the following:
1. improved productivity, thanks to the improvements in software effected between upgrades
2. no compatibility issues - again these cost money; by constantly being up-to-date, we have no risk of not being able to read that vital document.
3. better budgeting. If we know that our software will cost $x/year, every year, we can budget for that. There is then no risk of unseen costs.
4. reduced impact on cashflow. Subscriptions mean that there is a lower initial cost - this means there is more money available to develop the business *now*.
The thing is, subscriptions are just being realistic - if you pretend that you're still going to be using those P3's running Office xxxx in 5 years time, you're wrong.
All the subscription/ASP approach acknowledges is that we have to upgrade anyway - companies are always upgrading hardware and software in order to gain the productivity benefits they attract.
Regularizing this, and making this explicit is not a harmful thing to do.
They won't be doing this with Linux or other open OSes, so why should I worry about it? I'll just point at Windows users and snicker. Much like I do now... ;-)
You have an option to use another system if you're unhappy with the way your current one is heading. This can only be good for the open software movement in the end.
Think about the programs that you only use once a month or once a week or once only: financial software, inventory software, OS update/optimization software. You wouldn't pay monthly for something you only use monthly.
What would be nice for those programs and even larger programs (like Windows for us Linux users) is a pay per use program. I only use Windows if I want to play some games or use some random, legacy software. That amounts to a day or two per month. I would pay $2 per month to use Windows (if I didn't get a $5 full use copy through my University). That would be $24 per year and since the design cycle for OS software is about two years you would pay about $48 for an OS instead of $90 or more. Just a thought.
IANAL, but I play one on
It doesn't matter if you trust them or not, they will do this. The major problem I see is that subscriptions will become the main way to sell commercial software. What scares me is that once you are on the subscription bandwagon, as soon as the new version comes out you will be forced to upgrade _and_ pay up more money.
I'm already in upgrade hell on the PC's I support now, forced upgrades would make it even worse.
But, on the bright side, this will only server to make Open Source Software much more appealing to many consumers, and many businesses. Who knows, perhaps this is what is needed to get Linux on the desktop.
Contrary to popular belief on Slashdot, Microsoft has no major plans of becoming an Application Service Provider. Microsoft is primarily a software company and doesn't even handle a majority of its support (unlike, say Sun) but instead has an army of Microsoft Certified Solutions Providers who handle interaction with customers.
.NET servers to ASPs and corporate buyers who will then deal with the user issues. This can also be gleaned by reading Microsoft's ASP Services website instead of assuming the worst of those in Redmond. As for Dell, they've already formed an ASP known as DellHost, and thus it's very likely that once subscription software becomes the norm they will already have the infrastructure to provide software hosting solutions for their customers.
From talks with friends who have worked there, it is unlikely this strategy will change. Microsoft will primarily sell
L4M3R:One who thinks he is l337 because he uses "make" to install software instead of RPM
I can forsee the Dell's et al of this world shipping blank boxes (finally) and a complementary Windows X install CD which requires a internet connection and credit card. It would not suit MS to have Dell pumping out systems without MS getting the feedback they want (and the means to bill for extras) and I doubt Dell wants any more work reselling Windows and it's services (unless perhaps MS is offering them the full source to everything so they can run their own OS and application servers to push Delldows200X (but would Dell really want to do this, and if they did would they base it on the back of a resource that could be yanked from them).
Dell is never going to want to have to deal with customers ringing up saying their computer isn't working anymore only to discover it is because they haven't given MS the credit card details and the 1 year/3 month/whatever length trial has finished. If Dell can no longer ship the MS software they want with PCs as a permenent part of the PC I doubt they will charge for or ship one at all. All we have to do then is make sure all these people know that instead of being suckered for the monthly software fee they can install a number of alternatives (Be, BSD, Linux, Hurd).
Never underestimate the dark side of the Source
And don't expect them to allow you to purchase JUST microsoft Word. The least you will be able to get will be a Word/Excel/Outlook/Explorer package (You heard it here...they won't be giving explorer away anymore, but maybe they will pretend that you get it "Free" with your rental of Office.) For a slightly larger price, you might be able to add powerpoint/access/picture editor etc. By requiring the bundling, enough copies of their products will exist out there that nobody in their right minds would choose to use anything else. And they can charge more, because you are getting 3-5 pieces of software for one low price.
For example: If the rental price was $5/month/application, many home users would buy Word, maybe get outlook, and probably move to Netscape. Net sales/month: $10 if they are lucky.
But, if the rental price were $20/month for a package of four applications, and this is the least you can get, more than half of those same people who only got Word and Outlook would probably go for it. Net sales/month: $15-$20/month easily.
If the microsoft marketing department is looking to hire, I'm available.
gee, all your files aren't readable by your friends anymore?
:-)
You seem to be making the assumption that you will even have files.
Maybe your data is just squirreled away on the vendor's server somewhere. Convenient mechanisms to get the data into their system from open-source applications, but no easy way to get it back out. (Maybe even none at all, you know that whole DMCA circumvention thing.)
Who said you would have files and get to keep your data that belongs to the vendor?
Those who can, do. Those who can't, get their MCSE.
I'll see your senator, and I'll raise you two judges.
You are making a big, big assumption here. And that is that none of the incremental/update releases are going to cause problems or corrupt data.
.net@work document model needed some hooks in the network API?
.001% of users, will be hurting thousands of people.
One big advantage of using Static software is just that: it's static. Normally, barring some external event like running out of disk space, I expect that my copy of office 96 or whatever will run tommorow exactly the same as it is running today.
What happens when overnight, the automatically distributed and updated version of MyWordProcessor (version 11.02.31.21383) brings with it another new version NET.socks.dll that has a huge security hole that was added because the programmers who updated the "Track Changes->Compare Documents->Automatically" command to work fully across the new
What happens is that millions of systems have had their security compromised and don't even know it. The first people to know will be the ones looking for it; the security guys and the hackers. Lets hope the former always get there first. Oh wait, that assuming the company supplying the software will want to fix and update immediately, even if no one has been compromised yet.
The other big problem is the automatic updating of my data files. What happens if an update corrupts or otherwise can't handle a tiny (or not so small) percentage of user's files (because of specific feature combos used in that file, for example)?
What happens is that some small percentage of people have been selected at random to be SCREWED with respect to their documents. Will the subscription update models allow users to go back to previous versions? I don't think so. Besides, if I try opening a file with the newer version, and it auto-converts my documents to the newer format, and in the process some of documents get screwed, then if I can go back to the previosu version (why would they let me? Then I'd have grounds not to pay them) I'd better have made backups of my document files that I didn't know I'd need because I didn't know the "upgrade" is coming.
On that train of thought; what happens if I need to load up some docuemnt from four years ago that I've got backed up offline? Will mySubscriptionWare(tm) be able to read it, even though it's been updated every quarter since then (16 updates)? or am I screwed, unable to access my prior work because it was stored offline, and that file version is no longer supported? With no original disk to install the program I used to create it, what will I do?
Ok, the above isn't to say that it's all doom and gloom, but rather to point out that subscription ware it going to be a double-edged sword. And when you are talking about tens of millions of users (in the case of the largest company), problems that slip past testing and effect
I think it all comes down to the end consumer wanting at least the feeling of owning something. I mean, you fork over upwards of $3,000 for a new PC and what do you get? Some hardware that won't do jack shit without software. You own the hardware (physically, so you can sell it, trade it, give it away, etc, but aren't supposed to reverse engineer it and clone it - but you can) but you do not own the software. Somehow they managed to rip the pages out of the book...
; 2b=b;2=1
Let me explain why a computer is very much like a book. When you buy a book, you own that copy. You can, if you choose, give it to someone as a gift, sell it at a garage sale (eg. private non-commercial sale), rip it to shreds, and/or read it. You can do any of these things in any order you choose (eg. read it and then rip it up) and the author/publisher has very little to say about it. However, you have no rights in terms of the contents of the book - thats copyrighted, and you do not own it. Computers, otoh, you own the hardware and can do what you please with it. Like a book without pages, however, the computer is pretty much useless without software. Using the book analogy, and as an honest computer owner, you could do what you like so long as you do not duplicate the software without permission (just like the book, and this is very fair).
Microsoft will have you believe that the software is more important than the hardware and thus justifies a subscription service. They are partially correct in that you need an operating system to do anything other than look at the blinking lights and listening to the whirring fans of the hardware. I wouldn't mind it if it were an option; perhaps make WindowsXPUpdate a subscription service (although, one wonders why the customer has to pay MS for fixes to their buggy software)...
I guess what people are really upset about is the fact that Microsoft wants its customers to pay for the bugs in Windows. Yes, Windows is not perfect but it is widely used. Yes, Windows ME did include SOME new features not available in Windows 98. It is, however, debatable if these _new_features_ were worth the upgrade cost - you decide that when and if you decide to purchase the upgrade. Some people are still on 95, because it does what they need it to do, and Microsoft is fuming about this. They want you to constantly update and feed their R&D engine so they may engrain themselves deeper into our computers and our pocketbooks. Now Microsoft sees a chance to force consumers to pay and pay and pay for the rest of eternity... Hrmm... I guess the so-called "Microsoft tax" (per computer) is fast becomming a monthly tax. Geez.
I think the thing to do is for every Windows user to record each time Windows crashes. At the end of each month, send a bill to Redmond. Lets see who laughs when consumers start holding them responsable for the crap they want us to pay for.
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a=b;a^2=ab;a^2-b^2=ab-b^2;(a-b)(a+b)=b(a-b);a+b=b
Price, Quality, Time. Pick none. What, you thought you had a choice?
So, what happens? Well, it could go two ways, people stop paying for bloated SW packages they don't use the features for. They may only want Word's word processing modules, not Word's HTML export functions or the rest of office. Will Microsoft meet the demands of the market, and allow for customizable software packages? Or, will folks continue to pay for what they don't use, like they will a health club "membership," long after they've stopped using it?
Obviously, the SW makers would be OK with the second model, even if they won't come right out and say so. In fact, I'll venture to guess that they'd fight any such indication of that being widespread behavior. They really won't like the first model for a few reasons.
First, what are the natural divisions in the software. You can start with Word, Excel, PowerPoint, Access and Outlook. But what about common functions between programs as we now know them. The Office Assistant? Templates? Clipart? file browsing services? VB scripting? help documentation, Spell checking, macros, document module sharing (OLE). In my mind, it should all be up for grabs. Otherwise, why pay for it if you aren't using it? Microsoft will likely say nothing is "bundled," that everything is part of a core feature set of Word, or whathaveyou. The real question, is whether or not people will accept that answer.
Secondly, *if* such a distribution model is accepted, SW publishers would likely fight the release of any information that documents how their software is structured, allowing modules or lower or no cost to take the place of their own. This eats into their bread and butter. I foresee a few legal cases testing the ability of consumers to modify and extend products they are paying for the use of, but never really "own."
Thirdly, in order to preserve their own market space, Microsoft, et al, would likely actively change critical bits of their software in the name of improvements, but would oddly appear as actions to prevent competitors from offering an improved product. How this activity would be viewed by the FTC is unknown at this point. How would their customers respond, though?
Fourth, as an active counter measure, I believe SW manufacturers would explictly change their terms of use in an attempt to contractually prohibit the use of third-party software modules. However, from Wordperfect, Lotus 1-2-3 and DOS on, third party modules have had a long, very good history in terms of positively extending functionality for the consumer. QEMM for DOS 5 anyone? Norton AV at any time? What's the backlash when people find out they can't "legally" use these?
If the true a la carte model takes hold (though it may take a while and is dependent upon a few things), it represents what I consider the best opportunity for the open source community to make a meaningful impact to the rest of the computing world. Not to say that BSD, Linux, Apache, et. al. haven't been significant contributions, it's just that most Windows users don't know because they don't see it. If, however, modules for their favorite SW (Photoshop, Word, Excel, Quicken) were able to be replaced with free and open modules, they will see a difference. Ideally (and yes, this is very dependent on "forces beyond our control"), they'll see a smaller bill. And they'll think just how much they might not be spending if the entire package was free.
Obviously, this is quite conditional on other factors, but *if* this is the game the big proprietary SW publishers want to play, this community can, and should, embrace it as a Trojan Horse. The competition would serve everyone well.
--Humpty Dumpty was pushed!
Today Dell ships a copy of Office 2000 that will run forever
Ahhhh.....But will it do what my version of Office does???
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Moderator's essentials
You think as a technology worker...of course you will have a P-IX or an AMD-Superlon in 5 years. Not everyone will, believe me.
For instance our family computer (home usage) is a Pentium Pro 200 running NT4 that is 5 years old and we happily surf, wordprocess and 'spreadsheet 'on it. Damnit, with a Voodoo2 it even plays Halflife and Unreal very well at 800x600. I only did three major upgrades over those 5 years: a Voodoo2, more RAM and an ISDN adapter.
Now you may argue that I'm a computer geek that takes pride in runnnig older systems in todays usage...(which is absolutely true, I munched up a P166 for my sis so that she could do her dactlyography exercises). But let's go to my professional field: one of my clients is a government institution. Their old IT system (until 1999) was based on a Novell Server with plain XT's...as it did since 1987! For Y2K they got shiny new P-II-350's and a funky little server. Remember : Government institution + I did my job right: they *will* use these babies in 5 years. Heck they will use them in 10 years if they can!
Everything depends so much on your needs. And if you choose a computer based on your current needs plus a certain margin (for normal users power +25%, for power users +50%, for graphic users +100% or more) you can keep your computer for a great amount of time.
Oh, something I want to vent too: you talk about TCO for businesses. Now, your arguments may stand, but it should not be mandatory over the internet (like .NET?) Why? A technical reason would be low-bandwith connections but I see another issue: what about financial institutions? They don't want a connection to the internet, they don't want their documents on internet servers. With the security history of Microsoft, I don't think financial institution will trust this kind of option. For normal businesses (who don't really have critical data...hmmm, sounds weird to me) it could be a cost-saving approach, but for businesses where data == hard money forget it: they prefer to have full control and everything inhouse on servers with triple backup tape.
Ahhh...the great dumpster continuum. Many a free computer will be found there. -- sowth (748135)
I can see the intuitive appeal for many of these arguments, but I suggest that this only serves to highlight the pernicious nature of the commercial software business. Often, the "improvements" that we see from one version to the next are minimal, and certainly not worth any significant sum to buy.
As far as the attitude that one won't see P3s running Office XXXX in five years - I wholeheartedly disagree. I still run Office 95 on my P3. Why? Simple - it runs a *lot* faster than any of the more recent versions, and it offers all of the features that I am interested in.
Don't forget that the tradeoff for all those bells and whistles that no one uses (how many people really *need* to run text vertically in a table?) is FEATURE BLOAT. Which is why Office 2000 runs no more quickly on my P3 than did WordPerfect for Windows ran on my 386 nearly 10 years ago.