Microsoft to try offering Office via subscription service

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Microsoft to try offering Office via subscription service

Redmond (WA) – In an attempt to widen its horizons on productivity software, Microsoft has begun beta testing a subscription-based version of Office.

In addition to providing a more cost-effective option for buying the software suite, it could effectively end the need to upgrade to a new version every few years.

Thanks to heated competition from Google and others, Microsoft has been forced to expand its productivity software line.  The program, code-named “Albany,” has moved into beta phase according to a statement on the software giant’s website.

The move is likely a response to increased pressure from other players in the home office software market, which has historically not been a competitive business.  And it could lead to a win-win situation for the end users.

“Consumers…expressed frustration at having to spend time and effort installing different types of software, keeping current on new versions and getting their computers set up,” said Albany product manager Bryson Gordon.

In other words, instead of buying Office 2003 for a few hundred dollars and then buying a new version a few years later for another few hundred dollars, users could just pay a flat monthly fee and get software updates continuously.

The current price for an upgrade to Office Standard 2007 is around $240.  That’s the same price the 2003 edition retailed for when it came out.  So over a four year period, up-to-date consumers had to pay around $480.  Assuming Office 2007 remains the main version for the next four years, that’s an annual price of $60.  That would be much more palletable for most consumers.

Microsoft has, however, not mentioned anything about the price for the upcoming subscription-based Office software.

Though it is still eyed as the defining leader in home office software, Microsoft has struggled with increased competition from online applications like Google Apps, which offers the incentive of a free software suit that can also be easily used for real-time online collaboration.

Additionally, the open-source OpenOffice has been gaining traction.

To compete with the online collaboration part of Office, Microsoft is also working on Microsoft Office Live Workspace, which gives users the ability to share, collaborate, and comment on various Word, Excel, Powerpoint, and other files online.

In a beta version launched last year, each user receives a unique “workspace”, where documents can be uploaded and accessed by other users.  Each workspace can hold up to 250 MB of documents, for free.

Microsoft says it plans to launch the subscription service later this year.