Should Microsoft Stop Selling and Just Rent Their Software?

An article by Dana Blankenhorn on ZDNet.com has an interesting question she’s posing. At least I think this is a question she’s posing. Her article actually states that Microsoft should be afraid of open-source software, but I’m not sure that’s actually the case.

What they may need to be concerned with is a change in the software and computer application industry space and adjust accordingly.

Instead of selling Windows for, say, $150, through an OEM, sell one year of it for $99. Require registration for updates, and then charge $75/year for maintenance, just like the anti-virals do.

The same thing with Office. Don’t sell it for $500. Sell it for $300, but for one year only. Then ask for another year of maintenance. Or, even better, get their credit card and charge $30/month for the whole shebang, Windows, Office and all.

Now you’ve got recurring revenue, you’re actually getting more than retail (because people keep PCs for three years, not two), and you’ve got constant access to the customer’s PC in order to provide the service that customer is paying for.

That does make sense to me, but I’m just not sure how many people would adjust to that model.

For example, I keep my computers for quite awhile without upgrading them completely. I upgrade to a new Windows version when they come out, which isn’t exactly regularly. I’ll upgrade my Office applications maybe every version, maybe skipping one. ( I LOVE OFFICE 2007). For each of these purchases I plop down a chunk of cash, consider it an investment and I’m done with it. I don’t really think about the purchase price anymore.

Under her model, I would probably expect about a $100/mnth in software rental costs across all the computers in my household. That’s quite a regular expense to the monthly budget for most people. Not quite up there with your electric or cable, but pretty close.

What I do believe is that the current model needs to adjust and change. There’s also been lots of effort and discussion on why have software installed on your machine at all. Everything you need should be on the web. I really don’t agree with that for a few reasons:

1. We aren’t yet in a constantly connected, 100% of the time universe yet
2. There are times I don’t want to be connected, even when I could
3. There’s quite a bit more control over security and archiving if I’ve got a local copy of something on my machine and it doesn’t exist anywhere else.

What do you think? Would the rental model work for you? Should it all be online? Let us know in our new poll.